GBPNZD continues to respect its ascending trend line that has been providing solid support since the beginning of the uptrend, with the pair currently undergoing a healthy pullback to test key support levels.
The currency pair is trading around 2.3055 and appears to be finding buyers near crucial technical confluence zones. The Fibonacci retracement tool reveals several important support levels where bullish momentum could be rekindled.
The 38.2% retracement level at 2.30394 coincides closely with current price action, while the deeper 50% level sits at 2.29849. A more substantial correction could reach the 61.8% Fibonacci level at 2.29504, which aligns with the ascending trend line support and could serve as the line in the sand for the ongoing uptrend.
The 100 SMA continues to trade above the 200 SMA, confirming that the path of least resistance remains to the upside and that the broader climb is more likely to gain traction than to reverse. Both moving averages are trending higher, with the gap between them maintaining a healthy distance that reflects sustained bullish pressure.
If any of the Fibonacci support levels manage to attract renewed buying interest, GBPNZD could resume its advance toward the recent swing high around 2.32157 or potentially establish new higher highs. A decisive break below the deepest retracement level and trend line support, however, could signal a more significant correction toward the 2.27540 area.
The stochastic oscillator is currently moving lower from the overbought region, suggesting that the recent pullback could extend further as buyers take a breather. However, the oscillator still has room to decline before reaching oversold territory, indicating that sellers might maintain control temporarily.
RSI is also retreating from elevated levels but remains in neutral territory, suggesting that the overall bullish momentum hasn’t been significantly damaged by the current correction.
Earlier in the week, the RBNZ cut interest rates as expected while signaling a more dovish outlook while the UK CPI surprised to the upside and further dampened BOE easing expectations.