The GBP/NZD is what we would focus on today after it touched an important key resistance.
Technical Overview
Last Wednesday, January 25 we saw the currency pair touch a key resistance area at 1.7383-1.7492. Then a positive CPI was released from New Zealand which came at 0.4% compared to the previous one at 0.3%, so we saw the pair declined after that with 100 pips, and till now the pair has been trading around the same levels.
On the H4 chart we are waiting for a pin bar candle to confirm the downtrend although we can consider the candle from January 25 as a bearish candle. Still, we would prefer waiting for another clear one especially after the pair has touched the SMA50 and is increasing again. The Stochastic indicator is giving us a sell sign but the RSI is still wandering.
The Next Few Days
So, what can we do? From this analysis, we can sell the pair when we see the bearish candle around the resistance area or after breaking the SMA on a H4 timeframe and keep our target at 1.7060, but if the pair breaks the downtrend line we have to enter the market with a second scenario and buy the pair.
We have to be careful about upcoming hot news like the unemployment rate from New Zealand and the official bank rate from the UK next week.
