British Pound Crosses Reverse Following Large Gains
The British Pound crosses have reversed following major gains. There may an opportunity to get bullish the GBPNZD on this dip.
GBPCHF
There is no reason to change our call for a lower GBPCHF. There is a long term measured support level at 1.9125. The sharp advance from 1.9492 is in 3 waves (corrective) and favors the downside. A triangle could also be forming as wave 4. This is the alternate count. In this case, we would still see a drop below 1.9369, but not before additional range trading.
GBPCAD
Looking out longer term, channel support is near 1.84 this month (close to this month’s low at 1.8660). The next major chart support is not until the February 1993 low at 1.7668. We wrote last week that “a corrective bounce is underway near term (it appears); look for resistance at 1.9412.” The ‘bounce’ made it to 1.9562, just shy of the 50% of 2.0568-1.8664 at 1.9593. The rally from 1.8664 to 1.9593 is in 3 waves. We don’t know if this is just the first wave a larger correction such as a triangle or flat but price should come down and retrace a good portion of the rally.
GBPAUD
A long term downward sloping channel has contained price since September 2001. We wrote last week the “the rally from the lower end of that channel is in 5 waves (visible on the daily) so expect a corrective decline over the next several weeks and maybe months before the advance resumes.” The rally reached 2.3167, between the 50% and 61.8% of 2.5661-2.0291. Expect weakness near term before strength resumes. Potential support is at 2.2142.
GBPNZD
A C wave is working higher from the low earlier this year. This advance will most likely exceed 3.0702 within the next year. 2.5726 may be a wave ii of 2 low. A bullish bias is warranted against there. There is potential support from Fibonacci at 2.6686 and 2.6456.
TREND ANALYSIS is based on a rolling pivot model. LONG TERM TREND is determined by the last 3 months of price data (high, low, close). SHORT TERM TREND is determined by the last 4 weeks of price data (high, low, close). R3, R2, R1, PL, PH, S1, S2, and S3 are provided to aid in identifying entries and exits. These are objective measures and our subjective analysis (STRATEGY) may differ.
DailyFX
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