GBPNZD had previously been trading above a rising trend line on its 1-hour time frame but price made a break lower, indicating a reversal. The pair reached a low of 2.0900 before pulling up and showing signs of a correction.
Applying the Fib tool on the latest swing high and low shows that the 50% level lines up with the broken trend line. A larger pullback to the 61.8% Fib could also be possible since this coincides with a near-term broken support level also.
The 100 SMA is above the 200 SMA for now but a downward crossover appears imminent, ready to indicate that the path of least resistance is to the downside. RSI is on the move down so price might follow suit while stochastic has also made its way out of the overbought area to indicate a return in selling momentum.
With that, GBPNZD could be on track towards revisiting its previous lows at 2.0900 sooner or later. A break below this level could take place on stronger bearish pressure, taking it down to the next area of interest at 2.0800 or all the way down to 2.0650.
The BOE decided to keep monetary policy unchanged as expected but the minutes turned out less dovish than expected, triggering a quick bounce for the pair. Meanwhile, the RBNZ recently cut interest by 0.25% in their statement last week but recent data from New Zealand hasn’t been too bad.
The UK also printed a somewhat upbeat jobs report, as the economy added 18.8K jobs in February versus the projected 8.8K increase. The average earnings index rose from 1.9% to 2.1% to show stronger wage growth. There are no other reports lined up from both the UK and New Zealand for the rest of the week but a continuation of the risk-on sentiment could yield more gains for the Kiwi.
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