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On the daily chart after the strong bearish move currently, it looks like a correction is happening. We have a strong resistance zone that has formed based on the 100%(1.93002) Fibonacci expansion level of the big wave and the 100%(1.94484) Fibonacci expansion level of the small wave we have. We also have the 200 moving averages coinciding on the same area which makes this area a key resistance zone for us. The price which was moving higher reached this key resistance zone respected it and is currently moving lower from this zone. We also have a bearish divergence that has formed between the first high that has formed at 1.92116 and the second high that has formed at 1.94143 based on the MACD indicator which we may consider as evidence of bearish pressure. Also based on the Parabolic Sar the dots are above the price which we may consider as another evidence of bearish pressure. So everything looks good here for the bears, we may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
On the H1 chart, we have a good uptrend line that has formed and the price which is moving lower has currently broken below this dynamic support and is holding below it, we may consider this as evidence of bearish pressure. Also after this uptrend line breakout, we had a pullback with the price reaching a strong resistance zone, the price respected this zone and is currently moving lower. Also, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bearish pressure. In addition to this based on the Parabolic Sar, the dots are above the price here as well which we may consider as yet another evidence of bearish pressure. Until this strong resistance zone holds my view remains bearish here and I expect the price to continue lower further.
GBPNZD D1(Daily) Chart Analysis
Key Resistance Zone, Bearish Divergence, Parabolic Sar
GBPNZD H1(1 Hour) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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To your success,
Vladimir Ribakov
Certified Financial Technician
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