Key Bearish Breaks in GBP/USD and NZD/USD

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Key Bearish Breaks in GBP/USD and NZD/USD

Finally a little bit of volatility this week. As we get into the 5/28 US session. We are seeing some big moves in the USD and JPY crosses. The GBP/USD and NZD/USD are a couple of pairs that are seeing some key bearish breakout attempts. Let’s take a look:

GBP/USD Daily
gbpusd daily chart 5/28

Broken Trendline:
The daily chart shows a GBP/USD falling today and break below a rising trendline that goes back to Nov. 2013’s low of 1.5854. The breakout signals a bearish correction in development. If price can clear the 1.6730 low, it opens up the 1.6658 pivot, which is also the 100-day SMA.

RSI, Support, Pullback:
In this daily chart of the cable, the trend has been bullish, and based on Andrew Cardwell’s RSI-methodology, there should be support around 40. If price breaks below 1.6730 and settles around 1.6660, look for the RSI to hold around 40 as well. We might anticipate a pullback from here.

Bearish Target:
Now, if we get a pullback, and price still remains south of 1.68, we will have a stronger signal for the bearish correction toward 1.6551, and possibly the 2014-low at 1.6465.

While GBP/USD threatens to extend a bearish correction, NZD/USD is shifting from consolidation to bearish correction.

NZD/USD Daily:
nzdusd 5/28/2014

Bullish to Consolidation:
The Kiwi has been bullish since February, but quickly got into a consolidation by May. The daily chart shows a pair that pushed to a year-high at 0.8779, but is now falling below a key support pivot and 0.85 handle.

Topping, Pullback:
The breakdown of 0.85 puts in a large price top. The short-term target to the downside for the current breakout is the 0.8420-30 support/resistance pivot area. If the RSI is below 30 at that point, look for some short-term pullback.

Downside risk to 0.83-0.8350:
If a pullback fails to clear north of 0.86, we would have respect for the price top, and further bearish correction can be anticipated. The downside risk can extend toward the 0.83-0.8350 area, which includes the 200-day SMA, and a rising trendline that goes back to August 2013’s low of 0.7713.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com

Earlier: GBP/JPY – Failed Bullish Breakout Shifting to a Bearish Continuation Scenario