Great Britian Pound has been taking all the advantage of NewZealand Dollars weakness due to COVID-19 rising cases are being weighed on the risk sentiment and drove away from the perceived riskier kiwi. Expectations that the Fed will begin tapering soon underpinned the USD and added to the selling bias - weakening the NewZealand Dollar. Observing the weekly structure of GBPNZD, we have a head and shoulder formation of the highest degree and the pair is trading near the neckline 2.0100-2.03253. According to the elliot wave pattern, GBPNZD seems to have completed its impulsive 5 wave bullish structure with range bound behaviour. The pair has left the exponential moving average 50 and 200 in weekly behind at 1.95220 while currently trading below 61.8% fibb retracement level after taking a bullish reversal from 50% fibb retracement level. GBPNZD has formed a strong resistance at 2.00805 with a consolidating behavior in this zone.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

When we break down the structure of GBPNZD and come down to the daily chart, we can see that the 5 wave bullish structure has also been completed here with a double top formation which is an indication of awaited bearish strength. The elliot wave pattern and expected bearish correction is being called for by both the weekly and daily time frame, relative strength index on both the time frames have yet not entered the overbought conditions but might have the potential to climb a bit due to one specific reason i.e the market is still within our bullish channel and if the previous high is broken, we can witness GBPNZD reaching for 2.02547. For now, if the NewZealand dollar was able to gain some strength and recovery from the covid-19 cases, the bearish correction wont be much far. According to our factors mentioned in market forecast, our expectations are towards bears taking control and pulling the pair down towards 1.95604.

GBPNZD

Aug 20 2021