After we saw the Bank of England keep the exchange rate without change, the pound declined further against all currencies, especially the New Zealand Dollar which declined around 270 pips after the rate decision and Carney’s speech.
The GBP/NZD currency pair has reached the sell zone which we mentioned before at 1.7383-1.7492 on the daily chart. After touching this level the pair skidded to 1.7090 and formed a bearish engulfing candle which is a strong sign for the downside trend, and that’s exactly what happened the next day.
However, on the H4 chart the sign was clearer - the pair made another top at the trend line where we saw many tops and a bearish pin bar candle too at the sell zone. We can expect the pair to resume its downside journey to the last bottom around 1.6850.
The RSI indicator slope is still down and going to 10 level, while the stochastic indicator is still at 20 level.
The Next Few Days
Based on this analysis on the daily and H4 charts, we can sell the pair now at 1.7020 and keep our first target at 1.6770 and the second one at 1.6605. If it breaks the SMA 50 on the H4 chart and goes up we can buy the pair around 1.7500 after breaking the trend line too.
We have to watch out for upcoming hot news like Inflation Expectations from New Zealand tomorrow and the manufacturing production from the UK on February 10.
