By: Mike Kulej
The long-suffering British Pound might be turning the tide. Following prolonged downtrends, it made multiple all time lows in relation to many other currencies. Its cross with the New Zealand Dollar was one of them. This pair fell from about 2.9000 in 2008 to 1.9850 in 2010.
During the past few weeks, the price recovered some ground. This rally made reached a high of 2.1145, pulled back and is currently testing it. What makes this situation even more important is the proximity of yet another high at 2.1220. Combined these points form a formidable resistance level.
Possible Outcomes
Breaking this level will be a very bullish for the GBP-NZD. If the price manages to close above this resistance on the daily chart, it would be reasonable to expect the uptrend to continue. The first objective would be 2.1600, and the next one at 2.2200.
Many technical indicators support the bullish scenario. Both the ADX and the Momentum have already started to turn up. This needs to continue especially if the breakout takes place. All said, the daily chart indicates a strong possibility for the GBP-NZD to head much higher, if the current resistance is breached.