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Chart Art: Bearish Correction Levels on GBP/NZD and GBP/CAD

November 9, 2022| Forex Market

Bearish on the pound these days?

I’ve got a couple of quick retracement setups ready to play out on the 4-hour charts!

GBP/NZD 4-hour Forex Chart

GBP/NZD 4-hour Forex Chart

First up is this textbook correction setup that’s forming on the 4-hour chart of GBP/NZD.

The pair recently fell through the floor around the 1.9600 handle and has since dipped close to 1.9100 before pulling higher. A retest of the former support area, which happens to line up with the 50% Fib, might follow.

A shallow pullback could already find sellers at the 38.2% Fib while a larger correction might even reach the 61.8% Fib around 1.9675.

This happens to be right smack in line with the dynamic inflection points at the moving averages. And did I mention that a bearish SMA crossover seems be brewing, too?

Stochastic has been hovering around the overbought region to reflect exhaustion among buyers, so turning lower would confirm that sellers are back in the game.

Better be ready for a move back to the swing low or much lower if that happens!

GBP/CAD 4-hour Forex Chart

GBP/CAD 4-hour Forex Chart

Now here’s another break-and-retest setup you wouldn’t wanna miss!

GBP/CAD has already pulled up to the broken support of its ascending channel on the 4-hour time frame, so the reversal might gain traction if sellers return right here.

This potential resistance level lines up with the 50% to 61.8% Fib levels, which appear to be keeping gains in check. In that case, the pair could set its sights back on the swing low near 1.5200 next.

At the same time, Stochastic looks ready to head south from the overbought area, so price could follow suit.

Just be careful since the 100 SMA is still above the 200 SMA to reflect the presence of bullish vibes. A rally past the 61.8% Fib at 1.5600 could mean that pound bulls are refusing to let up.

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