Trend traders gather ’round!

GBP/NZD could also be in for a bearish swing because it struggles to make latest September highs near a key resistance zone.

Will it result in the pair extending its months-long downtrend?

GBP/NZD 4-hour Forex Chart by TradingView

The Recent Zealand dollar is recovering from when traders anxious about China’s data releases and U.S. and global growth and NZD hit notable lows. The British pound, alternatively, continues to be trading in wide ranges as traders price in mixed U.K. data releases and slight risk aversion within the European region.

Do not forget that directional biases and volatility conditions in market price are typically driven by fundamentals. In the event you haven’t yet done your homework on the British pound and the Recent Zealand dollar, then it’s time to examine out the economic calendar and stay updated on every day fundamental news!

GBP/NZD, which turned lower from 2.1900 at the top of July, has been trading in a downtrend. It recently found support from the two.1000 psychological level but has also hit a ceiling near the two.1200 levels.

Are we taking a look at a great place to leap in GBP/NZD’s downtrend?

Note that the pair’s current resistance area lines up with the R1 (2.1194) Pivot Point line and the 100 SMA within the 4-hour timeframe. More importantly, it’s just under the highest of a descending channel pattern on the chart.

Bearish candlesticks and sustained trading below the R1 Pivot Point line expose GBP/NZD to a possible move back to the two.1100 psychological level where the Pivot Point line is. If there’s bearish momentum, we may even see GBP/NZD revisit its 2.1000 lows.

But when GBP/NZD extends its September upswing as an alternative, then we could also be taking a look at a retest of the two.1300 channel resistance area. This will result in an upside breakout that might take the pair above the 200 SMA or the R2 Pivot Point area.

What do you’re thinking that? Which way will GBP/NZD trade in the subsequent trading sessions?