GBPNZD unable to break through key resistance level
British Pound/New Zealand Dollar (GBPNZD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 2nd day in a row, GBPNZD ended Wednesday at 1.9261 gaining 60 pips (0.31%). Closing above Tuesday's high at 1.9209, the market confirmed its breakout through the prior session high after trading up to 93 pips above it intraday.
Daily Candlestick Chart (GBPNZD as at Sep 16, 2020):
Wednesday's trading range has been 171 pips (0.89%), that's slightly above the last trading month's daily average range of 167 pips. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently higher than usual for GBPNZD.
After trading down to 1.9131 earlier during the day, the pair bounced off the key technical support level at 1.9140 (S1). The failure to close below the support could increase that levels importance as support going forward. Unable to break through the key technical resistance level at 1.9290 (R1), the forex pair closed below it after spiking up to 1.9302 earlier during the day. The failure to close above the resistance might increase that levels significance going forward. The currency found buyers again today around 1.9131 for the third trading day in a row after having found demand at 1.9114 in the previous session and at 1.9130 two days ago. The last time this happened on August 25th, GBPNZD actually lost -0.67% on the following trading day.
The FX pair shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Selling could accelerate should prices move below the close-by swing low at 1.9114 where further sell stops might get activated. With prices trading close to this year's low at 1.9004, downside momentum could speed up should GBP/NZD break out to new lows for the year.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for GBP/NZD. Out of 520 times, GBPNZD closed lower 53.27% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 53.08% with an average market move of -0.16%.
With four out of the seven Major FX Pairs closing higher today, the ones that stand out on the positive side are GBPUSD gaining 0.61% and NZDUSD closing 0.27% higher. On the flipside the worst performers have been USDJPY closing -0.47% lower and EURUSD losing -0.25%. Looking at the other Minor FX Pairs and Crosses, the winners of the day have been GBPPLN surging 0.81% and ZARJPY closing 0.78% higher. The worst performers of the day have been EURZAR tanking -1.42% and CHFZAR closing -1.28% lower. Read more