Sterling’s broad weakness took GBP/NZD below a key area of interest earlier this week!
Can the pair go back to its August uptrend?
We’re looking at a previous area of interest for potential pullback opportunities:
GBP/NZD 4-hour Forex Chart by TradingView
In case you missed it, worries about the U.K.’s fiscal mess pushed bond yields to levels we haven’t seen in years. Prime Minister Starmer shuffled his team, but now more traders are expecting the government to hike taxes to plug the hole.
Meanwhile, Kiwi has been trading as a counter to the yen and pound weaknesses. With traders still clinging to Fed rate-cut hopes, tariff questions hanging in the air, and New Zealand short on big-ticket data, the currency’s been riding on the others’ weaknesses more than its own story.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
An uptick in Sterling demand could lift GBP/NZD off its September downswing. We’re eyeing the 2.2700 psychological handle since it lines up with the 50% Fib of August’s rally, the S1 and S2 Pivot Points, 200 SMA, and a resistance area that capped prices back in June and July.
Green candlesticks or even a consolidation at the area could set up another run toward 2.2900 and 2.3000, maybe even the 2.3200 August high.
But if sellers drag the pair under 2.2700, the downside opens toward 2.2500 and 2.2300 previous areas of interest.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
