GBPNZD has formed lower highs and lower lows connected by a falling channel on its hourly time frame. Price is currently testing the channel resistance around 2.1300 and looks ready to resume the downtrend.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is likely to gain traction from here. Price seems to be testing the resistance at the dynamic inflection points at the moving averages, though.

Stochastic is on the move up to suggest that there is some upside pressure in play, and the oscillator has room to climb before reflecting overbought conditions or exhaustion among buyers. On the other hand, RSI is heading south to show that sellers are in control, and the oscillator has some ground to cover before reaching the oversold area.

A continuation of the slide could take GBPNZD down to the channel bottom at 2.0800 or the mid-channel area of interest closer to 2.1500. A break above the 2.1300 handle, however, could spur a reversal from the downtrend.

GBPNZD could take cues from the upcoming BOE decision, as the central bank is widely expected to keep rates unchanged for the time being. However, hinting that interest rate cuts are still likely in their next meetings could bring fresh downside for sterling.

Prior to this, the UK CPI figures came in line with expectations, barely providing strong clues on how the BOE decision might turn out. Expectations are for a 7-2 vote in favor of keeping borrowing costs on hold at 5.00%.

For now, the Kiwi seems to be bogged down by the weaker than expected New Zealand GDP, as the economy contracted by 0.2% in Q2 2024 while the previous period’s reading was downgraded from 0.2% to 0.1% growth.