Stochastic is indicating overbought conditions or exhaustion among buyers, so heading south would signal that bears are taking over. In that case, GBP/NZD could either make a quick retest of the broken resistance or try to find more buyers closer to the triangle bottom.
Note that the RBNZ already announced its tightening pause a few weeks back, so the tide could stay in favor of the U.K. currency if the BOE retains its very hawkish stance.
The forex pair is just starting to close above the top of its ascending triangle pattern, hinting that a rally of the same height as the formation is in the works.
The 100 SMA is above the 200 SMA to confirm that bulls have the upper hand and might be able to take this pair to fresh highs. In addition, the moving averages line up with the triangle bottom to add to its strength as support in the event of another selloff.
Hoping to catch a big breakout?
Check out this potential trend forming on the 4-hour chart of GBP/NZD while it’s still early!
Now the triangle pattern spans around 2.0400 to 2.0900, so the resulting uptrend could last by roughly 500 pips if bullish momentum is sustained.
Technical indicators are looking mixed for now, though.
Or do you think they’ll make a “dovish hike” this time, too?
GBP/NZD 4-hour Forex Chart by TV
Don’t forget that the BOE monetary policy decision is coming up and might bring extra volatility to pound pairs, especially if the central bank shifts its policy bias.