GBP/USD showing signs of a strong recovery
The GBP/USD pair has broken higher in a convincing manner, following some indecision at the lower end of this clear bottoming-out formation. The previous resistance level of $1.5241 has provided support this morning, and I expect to see the pair reach $1.5289 in the near future. This rounded bottom in GBP/USD leads me to believe we will have a decent amount of upside to come and therefore I am bullish as long as the price remains above $1.5223. Near-term resistance come in around $1.5289, $1.533 and a longer-term level to watch is $1.5467.
GBP/JPY resurgence from long-term trendline
GBP/JPY is showing signs of a resurgence from an ascending trendline that began a year ago (October 2014). The market is moving sharply higher in the current candle following a retracement lower and the signs are pointing towards a strong resurgence in this market which would correspond with a similar one I expect in GBP/USD. The clear creation of new highs and higher lows points towards a move back to ¥184.42 in the near future. Be aware that this market is relatively choppy and volatile, yet while we remain above ¥182.50, the likeliness is that we will continue to create new highs.
NZD/USD spikes higher, but a retracement could soon be due
Yesterday’s bullish view of NZD/USD was clearly well warranted, with the pair spiking over 120 points since the midday low. Clearly this trend is in place for possible further gains, yet I am aware that we are likely to see another retracement or consolidation phase soon. Much like that seen yesterday and last Thursday, a retracement or consolidation is natural within a nice trend and often is seen as a good place to either enter or increase holdings.
For now, I am looking at the stochastic oscillator which is around the general area which the indicator tops out, while lows are increasing to create a tightening triangle formation. The only realistic break would be lower and I would expect this to bring selling for NZD/USD. This may be short term but I personally would be hesitant entering now, and instead am watching for a retracement in the near future.