This sterling pair has formed lower highs and higher lows to create a symmetrical triangle on its 4-hour time frame.
Are we about to see a breakout soon and which way will it go?
GBP/NZD Daily Forex Chart by TradingView
GBP/NZD is closing in on its symmetrical triangle support around the 2.1950 minor psychological level just as the U.K. gears up to print top-tier data while the RBNZ decision is lined up.
Will these top-tier events spur a triangle bounce or breakdown?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Slightly stronger inflationary pressures are eyed for the U.K. economy, possibly allowing sterling to shrug off downbeat vibes from the dovish BOE split earlier this month, while the New Zealand bank is expected to announce an interest rate cut this week.
If the triangle support holds for GBP/NZD, the pair could set its sights back up on the resistance near R1 (2.2150) or at least until the pivot point level (2.1990) near a major psychological mark.
Note that the 100 SMA is crossing above the 200 SMA to hint that the path of least resistance is to the upside but that the pair is trading below both moving averages, so these could hold as dynamic resistance levels near the middle of the triangle.
Meanwhile, a break below support could set off a drop that’s the same height as the formation, with the pair possibly encountering buyers near S1 (2.1800) then S2 (2.1650).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!