In our last report about the GBP/NZD currency pair we recommended selling the pair in the supply zone at 1.7400 in the first days of February. We sold it after we saw the H4 reversal candle and made profit of more than 400 pips in just four working days.
Today we saw the pair in the same zone again (1.7383- 1.7489) which is so strong that the pair couldn’t break it for five weeks. We plan to do what we did the last time and wait for another reversal bearish candle, then sell it instantly once the candle is closed and sell again after breaking the SMA and trading below it.
If you take a look at the daily chart you would notice that the pair is touching the SMA which is a strong resistance area, so it would support our expectations about the pair. The stochastic indicator will make a cross above 80 level and once we see that, we would move to the H4 chart and wait for our favorite candle to sell the pair. Note that the stochastic on the H4 chart is currently crossing but we cannot enter the market now.
The Next Few Days
Basen on this analysis, we can wait for the bearish candle and sell the pair, keeping our first target at 1.7240 at the SMA50 and the second one at 1.7060 which is medium support area. Today the CPI figures will be released from the UK - the forecasted percentage is 1.9%. We are also awaiting next Thursday when the retail sales from New Zealand will be announced, so we have to be careful - the pair mighy change the trend and break through the supply zone.
