GBPNZD unable to break through key resistance level
British Pound/New Zealand Dollar (GBPNZD) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving higher for the 7th day in a row, GBPNZD finished the month 2.74% higher at 1.9740 after surging 193 pips (0.99%) today on high volume. This is the biggest single-day gain in over two months. Today's close at 1.9740 marks the highest recorded closing price since June 1st. The bulls were in full control today, moving the market higher throughout the whole session. Closing above Thursday's high at 1.9707, the currency confirmed its breakout through the previous session high after trading up to 72 pips above it intraday.
Daily Candlestick Chart (GBPNZD as at Jul 31, 2020):
Friday's trading range has been 243 pips (1.24%), that's far above the last trading month's daily average range of 140 pips. Weekly volatility is also higher, being way above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPNZD.
One bullish candlestick pattern matches today's price action, the White Candle.
Unable to break through the key technical resistance level at 1.9772 (R1), the forex pair closed below it after spiking up to 1.9779 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. When prices bounced off a significant resistance level the last time on May 19th, GBPNZD lost -1.25% on the following trading day.
With another close above the upper Bollinger Band, prices are confirming their strong upward momentum in the short-term. A drop back into the Bollinger Band on the next trading day while might signal a potential change in momentum that could lead to a correction back down towards the center of the Bollinger Bands at 1.9260.
Although the pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "7 Consecutive Higher Closes" stand out. Its common bullish interpretation has been confirmed for GBP/NZD. Out of 4 times, GBPNZD closed higher 100.00% 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 two trading days, showing a win rate of 75.00% with an average market move of 0.18%.
With five out of the seven Major FX Pairs closing lower today, the ones that stand out on the negative side are NZDUSD losing -1.04% and AUDUSD closing -0.72% lower. On the flipside the best performers have been USDJPY closing 1.12% higher and USDCHF gaining 0.48%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been USDZAR surging 1.87% and GBPZAR closing 1.79% higher. The worst performers of the day have been NZDCAD tanking -1.15% and NZDHKD closing -1.05% lower. Read more