Inverse Head and Shoulders Propel GBP/NZD Upward

By Tomasz Wisniewski|

Published: March 28 2024, 12:32 GMT+0

Inverse Head and Shoulders Propel GBP/NZD Upward


In today’s technical spotlight, we delve into the fascinating long-term dynamics of the British Pound against the New Zealand Dollar, a pair that has recently been at the forefront of an intriguing reversal trend. The antipodean currencies, notably the Australian and New Zealand Dollar, are experiencing a noticeable downturn today, propelling our focal pair, GBP/NZD, to its highest echelon since September 2023.

The daily chart unveils a compelling narrative through a pronounced inverse head and shoulders pattern, highlighted in yellow, with its significance underscored by a pivotal blue neckline. The turning point came on March 19th when this neckline was decisively breached, heralding a buy signal that has since been robustly validated. Following this breakout, a retest of the newly established support level ensued, which not only affirmed the bullish momentum but further fueled an accelerated ascent to current levels.

The ongoing rally holds a promising trajectory towards the orange line, marking a peak from August 2023. Given the pattern’s technical affirmation and current momentum, the probability of reaching this landmark appears markedly high, encapsulating a bullish outlook for the GBP/NZD pair in the near term.

However, it’s prudent to acknowledge the potential for a reversal to bearish prospects. A scenario where the pair retracts below the pivotal blue line would negate the current buy signal, transitioning the sentiment to a bearish one. Yet, given the prevailing market dynamics and technical indicators, such a turnaround seems to be on the fringes of probability.