GBPNZD has formed lower highs to trade below a descending trend line on its 4-hour time frame. Price bounced off this trend line and formed a reversal candlestick to confirm that the correction is over.

In that case, the pair could resume the slide to the next downside targets marked by the Fib extension tool. The 38.2% level is at the 1.9300 major psychological mark then the 50% level is at 1.9244. Sustained selling pressure could take it down to the 61.8% level near 1.9200 or the 78.6% level at 1.9120. The full extension is just slightly above the key 1.9000 handle.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. The 100 SMA also held as dynamic resistance on the latest pullback as well.

RSI is turning lower after reaching the overbought zone to signal exhaustion among buyers and a return in selling pressure. Stochastic is also moving south so price could follow suit while sellers have the upper hand.

There are no major reports from both economies in the upcoming sessions, which could leave risk sentiment as the driving factor for price action. Note that risk-off flows have been in play as the focus is on the second wave of the pandemic as the number of confirmed cases are on the rise in several parts of the globe.

With that, the Kiwi could be more vulnerable to declines versus the British pound as demand for higher-yielding currencies is sapped. Then again, Brexit uncertainties are also weighing on pound price action these days as it could add more challenges to the already embattled UK economy.

For now, the UK has reported stronger than expected business activity based on the manufacturing and services PMI reports for June.