The price has failed from a strong trend line with clear momentum shifts. Very strong confirmation to enter a short trade on GBPNZD
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There will be some resistance expected at the 50% fib level at 1.9000, same as what happened on Wednesday. Partly because it is a round number as well. However, I would hold the short position as I see huge potential for a further downside, all the way to the bottom of the range at 1.8617 level.
I would be looking for further opportunities to scale into the short position, if the trend pulls back to the 1.9080 level.
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We could see a Pull back to the 50% fib of the recent sudden drop, which coincides with the Kumo cloud and the Kajen Sen.
In which case, we could add to the shorts.
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I have posted the wrong chart. This is the correct one.
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The pair has regained momentum to the downside after letting off some steam from the strong bearish movement.
Buckle up for the bearish slide.
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Reaction as expected from mid-term resistance level. Still holding the sell as I expect a downward breakout soon.
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The pair is running out of momentum and consolidating.
Given the current price being stuck at a strong support, with lack of momentum, its time to take the good profit home.
Would be waiting for breakout of this strong support level then will enter on the short side again, although my view on the pair is different now. Probably the pair will go back to the top very soon. The NZD strength will be fading soon, and the GBP is gaining back some grounds.
Do you still hold the short with the latest spike?
Wahid_Elgohary
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@shettytushar, Hi, Yeah I am still holding until the break of the significant reversal level (the pinkish rectangle at the top of the chart, where the price is right now).
If the price broke out from this rectangle, then I would close at a loss. Otherwise I am planning to hold it for some time.
As you can see from the daily chart below, it is forming a head and shoulder pattern, which is a very strong pattern. It is probably a price spike that won't last for long, it is one of the typical Ichimoku false breakouts.
In of that is just mere probability, in case if it goes up beyond the significant level, I would close with a loss of course.
Shunya0x
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@Wahid_Elgohary, Thanks a lot for the detailed info. Perfect chart.
Wahid_Elgohary
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@shettytushar, I think it is quite clear now, the price has reversed from the significant level with another chart reversal pattern: "Parallel Pipes", where the green candle was followed by a red candle of approximately 80% the same size as the green candle.