Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to discuss GBP/NZD. This is one of the charts that I’m looking at for some upside this week. I’m going to explain later on why I think this market could move.
First of all, I will talk about the seasonality involved and why it looks good to the upside. I’ve placed a couple of boxes on here, which suggests what happened previously. We also missed one around there.
So, from the end of July and the start of August, we saw a rally in this market back in 2017. The market rallied to the upside in 2018; the marketplace remembers these are weekly charts. These moves are quite long, this was 2019 where we had a decent move to the upside, and now, we’re in a similar situation in 2020. Out of those four situations, three of them went oversold on the RSI, and we have some decent moves. The only one that didn’t go oversold on the RSI was this one, here, which was a shorter move. What I’m looking at, here, is the fact that we’ve got Kiwi on our strength and weakness table suggesting that it’s going to start to lose some value. So, I’m looking at selling the NZ Dollar against stronger currencies. The GB Pound is one of those currencies that looks like it’s gaining a little bit of strength – we see the market push to the upside.
I love the fact that the RSI goes into an oversold condition. Coming out of that on a weekly timeframe, that is a good sign that the price will push to the upside. I’m looking there previously as well. Looking at this from the weekly timeframe, I would say that this market is making lower lows. However, we’re in a retracement phase on the weekly, and it could come up into a couple of areas of resistance. I like to look at previous swing lows. Around 1.98, this area could be an area where the price retraces too before seeing any rejection. So, I like the idea of buying this market up into this zone.
Suppose I go into that daily timeframe. What I’m looking for is a trend: is the trend lining up with my bias? Because you can see, here, when the trend is moving, we want to be trading that. So, we want to be buyers of this market. We need to see an uptrend form, and at the moment, we’ve had this nice consolidation area, the market’s come back down, it’s moved sideways a little bit, retested the lows, but now it’s breaking out, which is a great sign.
So, what I want to see is a confirmed close above this candlestick high, through here. And the reason is that it will show us that the market could potentially change in cycle, moving to the upside. What I want to see is this market to form that new high. If it forms that new high, I want to say to myself: “the trend is potentially changing here”. GBP/NZD is potentially now moving to the upside. I want to look for that pullback into this key supporting zone, this previous structure high, and then look for those long trading opportunities, which I’m going to do on GBP/NZD. I’m going to look for the market to push to the upside, head for that 1.98 level, and then look for rejections at that point.
But at the moment, it’s still early days. We want to see another confirmed real close above, and then we can start looking for that retracement trade to the upside.
With GBP/NZD, we wanted to bring to your attention because of that weekly setup and the seasonal pattern that we’re starting to see from this market. So, it’s a really good opportunity to buy GBP/NZD. Keep this on your watchlist this week, and I’ll catch you in the next video.
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