GBPNZD broke below support around the 1.9000 major psychological mark then dipped to the 1.8500 levels recently. Price has since pulled back up to the area of interest, which appears to be holding as resistance.
The 100 SMA is still below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is likely to resume. Price is testing the dynamic resistance at the 200 SMA, which lines up with the 61.8% Fibonacci retracement level around 1.9330.
If this holds as a ceiling, GBPNZD could retreat to the swing low or lower. A break past this, on the other hand, could set off a reversal from the slide.
Stochastic is already turning lower from the overbought zone to show a return in selling pressure. The oscillator has plenty of room to go before reflecting oversold conditions, so the selloff could keep going. RSI has some room to climb before reflecting exhaustion among buyers, though.
Sterling has been on a tear thanks mostly to the successful vaccination rollout in the UK, although the Kiwi is also strongly supported by the same factors. The upcoming RBNZ interest rate statement could make things more interesting for the commodity currency this week.
No actual changes are eyed, but the central bank could share more insights on the recovery efforts for the pandemic and whether they’re likely to add stimulus anytime soon or not. Hawkish remarks could mean more upside for the Kiwi, along with a pickup in risk appetite.
The UK has its jobs figures coming up, and an increase in joblessness is eyed for January. Average earnings for the three-month period ending in December likely improved while the unemployment rate also probably dipped. Weaker than expected results, however, could mean more downside for the pound.