GBPNZD has been trading in a descending channel since the end of October. Several recent attempts at an upside breakout have failed, as prices once again test the channel boundaries.
As the candles break free, resistance has been met at the lower border of the Ichimoku cloud. The recent hidden bearish divergence now looks at another encapsulation into the channel.
The said level will be a confluence of the 1.88 area, leading prices to first touch the top level of the channel, before another turn to the median regression.
Should the mean act as another support, then the downward channel could ensue.
A look at an intraday perspective shows some exhaustion on the recent uptrend. However, should momentum wane, then this could lead to another potential hidden bullish divergence.
As we look at the next targets of the 23.6% and 38.2% of the 1.8524/1.9093 upside Fibonacci leg, we can see that the Ichimoku cloud is trading between the said levels.
The support and resistance areas will be crucial if the pair will drop back to monthly lows, or if it can stem the tide and once again move above the 1.91 handle.
