We have a very handsome bearish situation with the pair respecting all major price action principles in the GBP/NZD.
Since the beginning of the year, GBP/NZD has been in an uptrend. After a sharp drop, we entered a correction stage, which had much lower volatility. Correction is a beautiful flag pattern (black) that ended this week.
What’s remarkable here is that the price, apparat from respecting the flag lines, also respected the Fibonacci lines. 23.6% was a crucial support, and the 50% was an ultimate resistance. In the meantime, we were also locally respecting the 38.2%.
GBP/NZD already broke the lower line of the flag, which technically brings back the major sell signal. The last obstacle to a full bearish mode is a 23.6% Fibo. Once it is broken, even those on the fence could join the selloff. The potential target is at April low. Once the 23.6% Fibo is broken, getting there should be just a matter of time.
