GBP/NZD: neckline breached after pop higher; RBNZ still to come..
GBP/NZD has broken above a key level in the run up to the RBNZ rate meeting on Wednesday, a further bullish move which is in line with the consensus forecasts that the kiwi dollar could depreciate as a result of a rate cut.
The pair has been rising ever since touching support from the 200-day MA at 2.2272 several days ago.
It has broken above a key trend-line for the move down - a further bullish sign, and now the neckline of the double-bottom at 2.2783.
The break has come earlier than predicted since we still don't know the RBNZ's decision.
Nevertheless, given the central will on balance probably lower rates the move will probably continue higher towards the nexus of resistance at around 2.2970, where the 200-4h is located and likely to provide a resistance.
MACD has just signalled a change of trend higher, assuming the current bullish candle remians positive at 12pm GMT, when it closes.
Traders beware
Whilst the upside bias remins, some caution should be exercised prior to the RBNZ news release.
Volume remains a little tepid, for example, and move off the lows is also still only composed of 3-waves, which means it could be simply a corrective A-B-C of the previous down-trend.
Therefore the ideal development would be for the C wave to finish and to pull-back this aternoon- indicating the A-B-C has completed.
Then a break above the C wave highs would provide a definitive confirmation of a bullish reversal, as it wuld reverse the direction of peaks and troughs.
