GBPNZD has been in a bearish trend for the last couple of months. The price is making lower lows and will possibly drop further as the market structure is still bearish.

The formation of a bearish head and shoulder pattern signals an impending downtrend. The H&S pattern is an important indicator of the continuation of the bearish trend.

I am expecting the price will retrace to the shoulder of the 2.05500 resistance level and the right shoulder of the pattern before the drop. I will short the GBP/NZD once the price retraces to the 2.0550 resistance level and my target for this trade would be the 2.0300 daily support level.

Fundamentally, the price of GBP/NZD correlates with the US dollar index. If the US dollar gains the price of GBP/NZD goes up and if the USD drops the price of GBP/NZD also drops.

The jobless data and NFP data will be published on the US dollar on Thursday and Friday respectively. If the data turns out positive the price of GBP/NZD will go up and if the data turns out negative the price of GBP/NZD will drop.

• GBP/NZD will likely retrace back to the 2.0550 resistance level before heading for new lows.  
• I am expecting the price will drop to the 2.03000 support level in the coming days.
• Multiple take-profit levels have been added to secure profit along the way.
• The risk-to-reward ratio on this trade is 1:2.3.
• The entry and stoploss prices have been placed at secure levels with a high winning probability.
• Good luck!

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