In our Gaps Gone Wild! thread, we discussed how the fiscal cliff resolution announced over New Years' Day resulted in gaps across many markets. While many of those gaps have since been filled, there are still a few lingering.
One I have on my mind is GBP/NZD. See the chart below; I believe we're in the midst of a reversal, signaled by the hammer candle highlighted on the chart, and that this reversal could result in the gap being filled.
GBP/NZD" title="GBP/NZD" width="1365" height="636">
If the gap is filled, I'd be looking for opportunities to try shorting again -- especially given that there is a resistance level that coincides with the gap, and that I believe the fundamentals still warrant GBP to continue declining against NZD over a longer period, as it has for the past decade.
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