GBPNZD closes higher for the 2nd day in a row
British Pound/New Zealand Dollar (GBPNZD) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, GBPNZD finished the week 0.76% higher at 2.0277 after edging higher 16 pips (0.08%) today. Trading up to 56 pips lower after the open, GBP/NZD managed to reverse during the session as bulls took control ending the day above its opening price. Ending the day with an indecisive close, neither buyers nor sellers were able to gain control during the session.
Daily Candlestick Chart (GBPNZD as at Feb 14, 2020):
Friday's trading range has been 97 pips (0.48%), that's far below the last trading month's daily average range of 170 pips. Weekly volatility is also lower, being slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPNZD.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man.
After trading down to 2.0204 earlier during the day, the forex pair bounced off the key technical support level at 2.0230 (S1). The failure to close below the support might increase that levels importance as support going forward. After having been unable to move above 2.0277 in the previous session, the currency ran into sellers again around the same price level today, missing to move higher than 2.0301. The last time this happened on Wednesday, GBPNZD actually gained 1.08% on the following trading day.
While the pair is currently in a short-term downtrend, this could just be a correction, as both the medium and long-term trends are still bullish.
With prices trading close to this year's high at 2.0438, upside momentum might speed up should the FX pair be able to break out to new highs for the year. As prices are trading close to February's high at 2.0419, upside momentum could accelerate should the market mark new highs for the month.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Hanging Man" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for GBP/NZD. Out of 41 times, GBPNZD closed higher 53.66% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 65.85% with an average market move of 0.49%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are USDCAD losing -0.12% and EURUSD closing -0.08% lower. On the flipside the best performers have been USDCHF closing 0.28% higher and GBPUSD gaining 0.02%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDSEK surging 0.51% and EURSEK closing 0.43% higher. The worst performers of the day have been EURHUF tanking -0.65% and USDHUF closing -0.58% lower. Read more