Chart: Trend Resistance Area for GBP/NZD

Trend traders gather!

GBP/NZD could be in a bearish swing as it struggles to make fresh September highs near a key resistance area.

Will this lead to the extension of the downtrend of the pair from Monday?

GBP/NZD 4 Hour Forex Chart from TradingView

The NZD is rebounding as traders fretted over China’s data releases, and US and global growth and the NZD hit notable lows. Sterling, on the other hand, is still trading in wide ranges as traders price in mixed UK data releases and slight risk aversion in the European region.

Remember that directional biases and market price volatility conditions are usually driven by fundamentals. If you haven’t done your homework on the pound and the New Zealand dollar yet, then it’s time to check the economic calendar and stay up to date with the daily fundamentals!

GBP/NZD, which has fallen from 2.1900 at the end of July, has been trading in a downtrend. It recently found support from the psychological 2.1000 level, but also touched a ceiling near the 2.1200 levels.

Looking for a good place to jump into the GBP/NZD downtrend?

Note that the pair’s current resistance area lines up with the R1 pivot point line (2.1194) and the 100 SMA on the 4-hour time frame. More importantly, it is just below the top of a descending channel pattern on the chart.

Bearish candlesticks and sustained trading below the R1 Pivot Point line expose GBP/NZD to a possible move back to the psychological 2.1100 level where the Pivot Point line is located. If there is bearish momentum, we may even see GBP/NZD retrace to the 2.1000 lows.

But if GBP/NZD instead extends its September rally, then we could be looking at a retest of the 2.1300 channel resistance area. This may lead to a positive breakout that could take the pair above the 200 SMA area or the R2 pivot point.

what do you think How will GBP/NZD trade in the next trading sessions?