Trade Setup for Monday
In this guest trader update, Martin highlights a potential GBP/NZD setup for the start of the week. After securing a $6 gain on a recent gold trade, attention now shifts to the British pound against the New Zealand dollar
Technical Outlook
I tend to avoid entering new trades late on Fridays, particularly ahead of events such as Non-Farm Payrolls. Because of this, I’ll wait until Monday to look for an entry on GBP/NZD.
The pair has created a double top formation, which often suggests downside potential. Price is currently testing the neckline support while the Commodity Channel Index (CCI) is moving below 50. However, the 50-period moving average and the 38.2% Fibonacci retracement remain close by and could act as barriers, making the setup somewhat risky given the short-term upward channel.
Projected target: ~176 pips lower
Stop-loss level: ~115 pips above, near the Fibonacci zone
Although the risk-to-reward ratio is not perfect, if the double top plays out, there’s scope for a deeper move — potentially extending toward the 1.94180 region or the 100% Fibonacci retracement.
Fundamental Factors
The outlook for NZD also leans positive. The AUD has been picking up on trade deal optimism, while improved risk sentiment and firmer gold prices add to the supportive backdrop. For context, my recent gold position (opened on 10.01.2020 at 15:30 local time) is performing well.
Trading Plan
On Monday, I’ll be watching to see if price breaks and closes below the highlighted support zone. If confirmed, that would be my trigger to go short. This analysis is based on the 4-hour timeframe.
Wishing you a great trading week ahead.
