GBPNZD tests upper line of enormous triangle pattern
23 March 2023
In the technical part today, we shall take a look at the long-term situation on the GBPNZD that may be considered an exotic pair and is probably not traded very often. Here, for the past 6 years, the price has been moving pretty much sideways, creating a giant symmetric triangle pattern (red).
The price going only right, instead of up and down, is not really encouraging, but remember that this is a weekly chart and those moves still have the potential for short and mid-term trading. Most recently, the price bounced off the upper line of the triangle, which promotes a comeback to the bearish move and testing the lower line of the triangle in the future.
The way to trade triangles is pretty simple. As long as the price stays inside, it is common to trade bounces. Once the price escapes the triangle, you trade breakouts. Which way will the price break? This is, in fact, not really important. As a trader, you should react and trade the move regardless of the direction, so the price breaking the upper red line will be a signal to buy; and breaking the lower line will be a signal to sell.