GBP/NZD 4H Chart: Long-term trend-line breachedThe four-hour chart reveals that the Sterling has been trading sideways against the New Zealand Dollar since mid-October, 2017. This movement has been constrained in a flat descending channel. The Pound was moving along a long-term trend-line since the beginning of 2018 prior to breaching the given line this week.
From theoretical point of view, this breakout should point to a medium-term decline. The fact that the Pound breached the 55-, 100– and 200-period SMAs likewise adds some ground to this bearish scenario. The rate was testing the weekly S2 at 1.9227 mid-Friday.
It is likely that some short-term correction up to 1.96 occurs early next week. However, bears should eventually take the dominant hand and push the rate lower, setting the bottom channel line and the 23.60% Fibonacci retracement at 1.86 as a possible target during the following months.
