GBPNZD is trending lower on its hourly time frame, with price forming lower highs and lower lows inside a descending channel. The pair is gearing up for a test of the resistance at the 1.9300 handle.

Technical indicators point to a continuation of the slide, which might take the pair back down to the bottom of the channel at the 1.9100 mark. The 100 SMA is below the 200 SMA to suggest that the path of least resistance is to the downside or that resistance is more likely to hold than to break.

In addition, stochastic is already in overbought territory to reflect exhaustion among buyers. Turning lower would confirm that sellers are returning and could at least take GBPNZD down to the middle of the channel at 1.9200.

RSI has a bit of room to climb before reaching the overbought area to signal exhaustion among buyers, so there could be some bullish pressure left. A break past the channel top, however, might mark the start of a reversal from the downtrend.

There have been no major reports from both New Zealand and the UK economy so far, but it’s worth noting that the BOE might be in for another interest rate hike soon. Earlier on, the UK printed stronger than expected CPI figures that could prompt the central bank to tighten monetary policy once more.

Meanwhile, New Zealand’s economy seems to have stabilized already, as the RBNZ had acted early in order to keep inflation in check. A recession could be avoided in the country, which could mean more upside for the Kiwi.

However, a lot could hinge on overall market sentiment with the FOMC decision coming up. A pickup in risk-taking spurred by a “dovish hike” could lend some upside for the higher-yielding NZD.