GBP/NZD: levels to watch following the triangle b/o.

I Tweeted yesterday that it might be worth watching the GBP/NZD for any triangle breakout move as the triangle could be worth up to 1,200 pips. Well, the triangle was broken overnight and has already given up to 130 pips. There is a lot more potentially on offer here though but price is currently at a major S/R zone that needs watching. All is explained below.

GBP/NZD 4hr: This is how the chart appeared in yesterday’s Tweet:

GN4hr

This is how the 4hr chart appears this morning for me. There has now been a break of the triangle trend line and price is currently testing the key 2.10 level which is the next main level to monitor here. I note the ADX is now above the 20 threshold level but, interestingly, I don’t have any new TC signal to SHORT here at the moment. This may well evolve but it hasn’t as yet:

GN4hr

The 30 min chart shows how this trend line break came during the late Europe/ US session and gave a 130+ pip move from the trend line alone:

GN30min

That’s all well and good and great for people who caught this breakout move but I consider the 2.10 level might delineate the next major move on this pair. The 4hr chart above shows a potential 1,200 pip triangle that has now broken out. It is worth noting however that there is a larger triangle on the daily/ weekly chart in progress as well and that the move down to test the lower trend line of this pattern is a move of, you guessed correct, about 1,200 pips. How’s that for confluence?

GBP/NZD daily: the 4hr chart’s triangle can be see to sit within a larger triangle on the daily/weekly charts. The 1,200 pip target for the 4hr chart’s triangle breakout would take price down to test this larger triangle. The daily candle has just closed (on my platform) below the key 2.10 level:

GNdaily

GBP/NZD weekly: any break and hold below the weekly chart’s triangle pattern would have me looking for a test of the previous low down near 1.77. This chart also gives you a good understanding of just how important the 2.10 has been for this pair:

GNweekly

Thus, I suggest keeping an eye on the 2.10 level as:

  • a failure to hold below 2.10 would void the current 1,200 pip triangle move. This might also then support a retracement move higher.
  • a hold below 2.10 would support a bearish bias and a possible test of the weekly chart’s triangle support trend line. This is a move worth around 1,200 pips!

I would expect that if one eliminates the US$ as a variable between these two currency pairs then the main economic issue at play is the Brexit one, BUT, whether this could fuel such disparity here remains to be seen. Thus, keep an eye on the 2.10 level for clues!