GBPNZD Ends the Bullish Correction, Which Started on Monday

Today we’re focusing on the GBPNZD, where the price is currently drawing a very promising bearish setup. This pair may also be interesting for today as it doesn’t have the USD in it, which may be a good option with election results being too close to call at the moment.

Throughout the whole of October, GBPNZD managed to create a massive Head and Shoulders pattern (grey). At the beginning of November, sellers managed to pull the price lower and break the neckline (yellow), which technically brought us a sell signal. The selloff continued until the end of last week, while the new week, at least first 3 days of it, brought us a bullish correction. This small bullish correction ended slightly below the 38,2% Fibo, which currently can be confirmed as a key horizontal resistance (green).

The end of the European session on Wednesday brings us a breakout of the support of this correction (red), which in this case can be considered an end to this correction and a first step of the comeback to the main bearish trend.

Should the price manage to close the day below the red uptrend line, the sell signal will be confirmed. As for the target, I think that the blue area around the 1.878 is a reasonable place, as these are the lows from March, August and September.