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by Charalambos Pissouros

GBP/NZD Stays in Rally Mode

GBP/NZD traded higher on Thursday, breaking above Wednesday’s high of 1.9525, and also overcoming the 1.9600 level. That said, the advance was paused near the 1.9640 barrier, marked by the high of June 11th. Overall, the pair has been trading in a rally mode, above a steep upside line, since July 23rd, and thus, we would consider the near-term outlook to be positive.

A clear and decisive break above 1.9640 may allow the bulls to target the 1.9725 barrier, marked by the high of June 3rd, the break of which may set the stage for the 1.9770 zone, which provided decent support between May 27th and 29th. Slightly higher lies the 1.9820 hurdle, which could also get tested. That level marks the inside swing low of June 1st.

Turning our gaze to our short-term momentum studies, we see that the RSI likes well above 70, but has just ticked down, while the MACD lies above both its zero and trigger lines. Both indicators detect strong upside speed, but the tick down in the RSI suggests that a corrective setback may be in the works before the next leg north, perhaps for the rate to challenge the 1.9525 level as a support this time.

In order to start examining whether the bears have stolen the bulls’ swords, we would like to see a strong break below 1.9450. The rate would already be below the aforementioned steep upside line, and the bears may target yesterday’s low of 1.9390. Another break, below 1.9390, could see scope for more negative extensions, perhaps towards the 1.9295 obstacle, defined as a support by Monday’s inside swing high.

GBP/NZD 4-hour chart technical analysis

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