MARKET FORECAST : GBPNZD followed our analysis which was published on 8th june with bullish sentiments, TP 1.99537 and then reverted to our previously mentioned major support. Now we will discuss the current market trend under major time frames and connecting it to the developed momentum in daily chart. For now we have a neutral stance based on the conditions below and will execute the trades according to the structure formation and breakout of the levels mentioned. 

MONTHLY TIME FRAME :  On the monthly chart we have a head and shoulder pattern which initially began as a 5 wave bullish impulse from 1.68150 in Feburary 2017 and ended at 2.17540 in March 2020. The current market structure seems to be forming a 5 wave bullish of a smaller degree because of the instant resistance from the head and shoulder at 1.99560. 

WEEKLY TIMEFRAME : Here we also have a head and shoulder of highest degree with a 5 wave bullish formation of a smaller degree which is being restricted by the same resistance and might push the pair for a short term correction before continuing its bullish impulse. 

DAILY TIME FRAME : We have a double top formation in daily time frame which is suggesting that the market will go for 1.95000 as a correction where our 61.8 fibb level is situated and EMA200 as well which will provide a bullish reversal or impulse - only the completion of correction will decide. The double top structure is mostly the end of a 5 wave bullish impulse and the market will provide a corrective wave formation and its degree depending upon the highest highs and lowest lows. In that case most probably will find the pair diving at 1.92382 in worst case scenarios and then we will witness the market going for its 5th wave bullish impulse under monthly time frame. Also that means that the market would have broken our trend line which will become a deciding point in daily chart if we will see a bearish formation taking place because of the head and shoulder structure in weekly and daily or will the market provide a higher bullish breakout and the highest degree of the aforementioned structure in weekly time frame with its next major resistance at 2.03000.  

GBPNZD D1

Jul 17 2021