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Bullish Flag Threatens to Break GBP/NZD Downtrend

The US Presidential elections followed a few days after a rather bullish factor for the UK pound — the High Court decision that the Government will need to consult the Parliament on the matter of Brexit. Both have triggered the rally in the British pound. At the same time, the New Zealand dollar has been weakened by the country’s central bank’s decision to lower the interest rates. This combination has created the current situation on daily GBP/NZD chart — a bullish pennant pattern ready to break out to the upside. It threatens to ruin my GBP/NZD carry trade but offers a trading opportunity of its own.

The pole and the borders of the pennant part are show with the yellow lines on the chart below. The cyan line is my potential entry level should the breakout occur. It is placed at 10% of the pole’s height above the upper border of the pattern. The green line will be my take-profit level and is placed at 100% of the same distance measured from the pole’s top. I will set my stop-loss to the low of the breakout bar. I will ignore a bearish breakout from this pattern because bullish flag is an uptrend continuation signal. You can click on the image below to see the full-size screenshot:

GBP/NZD - Bullish Pennant Pattern on Daily Chart as of 2016-11-20

I have built this chart using the ChannelPattern script. You can download my MetaTrader 4 chart template for this GBP/NZD pattern. You can trade it using my free Chart Pattern Helper EA.

If you have any questions or comments regarding this bullish pennant on GBP/NZD chart, please feel free to submit them via the form below.

Posted on Forex blog. Click Here For Original Source Of The Article

About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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