Technical Analysis – GBPNZD at 3 ½-year highs and near key resistance

Christina Parthenidou, XM Investment Research Desk

GBPNZD hit the highest point since June 2016 on Wednesday but the pair barely breached the October peak of 2.055 which is also a former key resistance area, sending warnings that the bullish momentum may soon lose steam.

Any downside correction, however, may prove temporary if the rising 20-day simple moving average (SMA) currently around 2.023 keeps supporting the market, shifting attention back to the 2.055 barrier. Beyond the latter, there is another tough obstacle around 2.080 that the bulls should overcome to pick up steam towards 2.150.

Otherwise, a closing price below the 20-day SMA could increase selling pressure towards the resistance-turned-support level of 2.000, a break of which could see another test of the ascending trendline, where the 50-day SMA is currently placed.

Summarizing, GBPNZD is trading at a crucial resistance area of 2.055 over the past few days and only a significant closure above it could generate fresh gains, bringing the uptrend off 1.8275 back into play too.