A great opportunity to go Long GBPNZD
After a significant drop in British Pound value I have just seen a few signals that shows possibly GBP will be appreciating. Moreover, I have been monitoring NZD and I believe this currency can potentially face a significant depreciation.
Stronger GBP plus weaker NZD, lead us to post this trade, GBPNZD Long.
I would like to talk about British Pound first.
1) See FTSE 100 , It is just reached into a significant resistance and I would expect a bounce. This means cheaper Pound.
3) This is UK 10 Yrs Gilt. Opposite correlation with Pound expected. This one has also reached to an overhead resistance.
5) UK Bond and self-explanatory. A bounce expected. Also has opposite correlation with Pound.
6) I had 5 satisfactory charts on GBP but his one does not look so good. It is Pound . I would expect this one to at least visit the as a resistance. From there we might be able to see uptrend continuation because of other 5 charts above.
Now let’s look at NZD. I expect to see cheaper NZD because of the following reasons.
1) This is New Zealand dollar index and has opposite relationship with NZD currency. It has broken the resistance and currently sitting at that as a support.
2) On the weighted average NZD I have observed a false breakout of the flag and followed by a break on the other side. Now the price is sitting below the lower parallel of the flag (both red and black) and now I expect it heading lower.
4) NZD yields also heading lower which is what we would like to see.
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