GBP/NZD: due some mean reversion?

The GBP/NZD has rallied over recent months and since April has put on over 4,000 pips. Price action has stalled of late though at a major monthly-chart bear trend line and one now has to wonder whether this pair might be due a bit of mean reversion. With the US$ and EUR FX indices both still range-bound then the various cross pairs may make for better FX trading opportunities.

GBP/NZD monthly: note how price has rallied over 4,000 pips since April but has stalled at a major monthly chart bear trend line. The breaks above 2.10 and 2.30 were significant but a little mean reversion, bouncing back down from this trend line resistance and back down to these previously broken levels, could easily evolve:

GNmonthly

GBP/NZD weekly: price action is struggling at the resistance of the bear trend line. Note how any 61.8% fib pullback, not at all out of the question even as part of an overall bullish move, would  bring the GBP/NZD down to the region of the previous breakout from 2.10. However, this recent price action could also simply just be some consolidation, by way of a Bull Flag, prior to bullish continuation. Hint: watch the trend lines for clues:

GNweekly

GBP/NZD daily: price action has been trading within an ascending triangle under this resistance. Watch for trend line breaks, up or down, for clues:

GNdaily

GBP/NZD 4hr: A new bearish TC signal is trying to form up here but there is trend line support below the current candle. There is also support from the 4hr 200 EMA and monthly pivot and so I would want to see a new TC signal and a break and hold below these levels before getting too excited about any possible move back down to 2.10:

GN4hr

Ichimoku Cloud: Price is below the 4hr Cloud but still above the support of the daily Cloud. The daily Cloud may offer some support here:

GBP/NZD daily Cloud: price is above the Cloud:

gndCloud

GBP/NZD 4hr Cloud:price has dipped back below the Cloud:

gn4Cloud

Summary: The GBP/NZD has experienced a lengthy bull-run since April but has stalled at major resistance. Watch the 4hr chart’s triangle trend line region and the ADX momentum indicator to gauge whether a bit of a pull back might be starting. Keep an eye on your trading calendars for data that impacts both the GBP and NZD and especially tonight for GBP CPI and NZD GDT data.

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