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GBP/NZD Long Opportunity at 2.1800

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

Last updated 12/29/2009 7:48 PM EST (GMT -5) 2 Comments

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Bradley W. Gareiss

Technical Analyst, GFT

A bullish butterfly pattern is emerging on the GBP/NZD 8hr Chart.  The pattern still has to drop fairly far to complete, but this is a strong pattern worth posting.  The symmetry of this pattern is great so far, and it also has two potential point X candidates that converge at almost the exact same level (we labeled the second point as "Y" on the Daily Chart).  The only issue at this point is that there is not great long term convergence because we have been in a downtrend for a very long time.

We are looking to buy the GBP/NZD if it falls to 2.1800 (Point D).  Point D is located at the convergence of the following points:

We will now go over what to watch for assuming the pair continues falling toward our entry at 2.1800.  If the pair moves down rapidly and has long bars near point D, we will not enter the trade.  Also, if the pair comes within 50 pips of reaching our entry, does not enter, and reaches T1 before entering, the trade is invalid.  The trade is also invalid if the pair rises above 2.2685 before hitting our entry.

To recap, we will look to buy the GBP/NZD at 2.1800 with our stop placed at 2.1567.  Our initial profit targets are 2.2150 (38.2% of CD) and 2.2429 (61.8% of CD).

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  • Daily Chart - Trade would enter just above 78.6% of YZ.
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  • 8hr Chart - Bullish butterfly; buy at 2.1800.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

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Comments (2)

Vespones

January 05, 2010 at 03:33 PM ET

Dear Brad,

One of my brokers charge 20 pip spread while the other doesn´t have this pair .

Is there any reason to choose this exotic pair ? I ´m sure there´s more fish in the sea

Thanks

bgareiss

January 05, 2010 at 03:36 PM ET

This isn't an exotic pair. The current spread with GFT is much less than you wrote. And even with a 20 pip spread, the spread is almost nonexistent compared to the scale of the trade. Brad

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