After an explosive move upwards, the GBPNZD chart is now looking very ‘over extended’ from the mean value. Typically when you get a large gap between price and the mean, the probabilities suggest a mean reversion is likely to occur. The market is already showing signs that it is looking ‘top heavy’ and potentially gearing up to move back toward the mean and ‘fill the gap’.
Last session a bearish Inside Day printed as price stalled and churned around at these extreme prices. If the GBPNZD market manages to break the low of the signal candle, then we could definitely see a nice bearish move develop off here. Will be watching the marked weekly level for any price action exit signs, but I believe if the bearish momentum picks up that level won’t hold.
Obsessed with Price Action Trading, Swing Trading & Breakout Strategies