GBP/NZD traded higher yesterday, after hitting support at 1.9352. However, the recovery remained limited near the crossroads of the 1.9500 level and the prior upside support line drawn from the low of November 8th. With that in mind, we believe that the bears could take charge again soon and push the rate back down.
However, in order to get more confident on the downside, we would like to see a clear dip below yesterday’s low of 1.9352. This will confirm a forthcoming lower low on the 4-hour chart and may see scope for declines towards the low of November 24th, at 1.9163, or the 1.9125 zone, which provided support on November 18th. If the bears are not willing to stop there, then a break lower could pave the way towards the 1.8975 territory, which provided support on November 10th and 15th.
Looking at our short-term oscillators, we see that the RSI hit resistance at 50 and looks ready to start topping, while the MACD, although above its trigger line, shows signs of topping as well within its negative territory. Both indicators suggest that the rate may start gaining downside speed again, which adds to the case of a forthcoming negative wave.
Now, in order to start examining the bullish case again, we would like to see a strong rebound back above 1.9690. Such a move will confirm a forthcoming higher high on the 4-hour and daily charts and may open the path towards the 1.9795 barrier, which is defined as a resistance by the high of August 25th. Another break, above 1.9795 could extend the advance towards the 1.9935 territory, marked by the high of October 22nd.
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