Hi Traders! GBPNZD short term forecast and technical analysis is here. We do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the daily chart here.
GBPNZD D1(Daily) Chart Analysis – Bullish Convergence, Downtrend Line Breakout, Resistance Breakout
On the daily chart, the price which was moving lower has created a bullish divergence that has formed between the first low that has formed at 1.88015 and the second low that has formed at 1.81190 based on the MACD indicator. The price then moved higher and broke above the last high at 1.93850 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidences of bullish pressure. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently, it looks like a correction is happening. In addition to this, the price which was moving higher has broken above the most recent downtrend line, which we may consider as another evidence of bullish pressure. Also, the price which was moving higher has broken above a strong resistance zone and is holding above it, which we may consider as yet another evidence of bullish pressure. So everything looks good here for the bulls and we may now move down to lower timeframe and see if we can find evidences supporting this short term bullish view.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
GBPNZD H4(4 Hours) Chart Analysis – Double Wave Correction, Key Support Zone, Bullish Divergence
Looking at the H4 chart, currently it looks like a correction is happening in the form of double wave down. Also, we have a key support zone that has formed based on the 61.8%(1.96071) – 100%(1.94131) Fibonacci expansion level of the first wave. The price which was moving lower, reached this key support zone, respected it and is currently bouncing higher from this zone. Also, we have a bullish divergence that has formed between the first low that has formed on 6th October 2022 and the second low that has formed on 12th October 2022 based on the histogram of the MACD indicator which we may consider as evidence of bullish pressure. So based on all this, until the key support zone holds my short term view remains bullish here. A valid breakout above the most recent downtrend line would be the validation for this bullish view.
Technical Analysis & Forecast Summary
GBPNZD D1(Daily) Chart Analysis
- Bullish Convergence, Downtrend Line Breakout, Resistance Breakout
GBPNZD H4(4 Hours) Chart Analysis
- Double Wave Correction, Key Support Zone, Bullish Divergence
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
