GBP/NZD Developing Stronger Uptrend

By: Mike Kulej

During the last few months, the GBP/NZD currency pair has been moving largely sideways. That is, when viewed on a longer term charts, like the daily. We can see price swings ranging in hundreds of pips, with very deep pullbacks, giving it an appearance of a large-scale consolidation.

Upon a closer inspection, though, one can recognize a bullish trend developing here. Granted, it is very slow and reluctant, but with a discernable progress. Since making the new low of 2.0330 in May, the GBP/NZD has been making new highs. Every upswing took this pair above its previous resistance, and every successive low was above the prior low. This is a definition of an uptrend.

Currently this move seems to be gaining some momentum. The price is once again approaching the latest high, at 2.2150, and going through this resistance could speed things up considerably. If this happens, the next important resistance is at almost 2.3000. The ADX indicator supports a more directional move this time, with the reading increasing sharply and pointing up. A slope like this suggests a strong trend under development. However, a breakout above 2.2150 is the key.