Sterling has been on a tear lately, but there might still be room to catch the rally with this range support test on GBP/NZD.
Will it head back up to the resistance soon?
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/CAD’s falling wedge pattern for an oil-related setup. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Treasury yields rise on hawkish Fed commentary
Biden administration reportedly planning sanctions on 300 Russian parliament members
Chinese city of Tangshan goes into lockdown due to rising COVID-19 cases
Asian equities get a boost as bond markets stumble
Crude oil prices advance as API reported a draw of 4.3M barrels in stockpiles
Ukraine President invited to address NATO summit
Japanese media: PM Kishida likely to call for another round of fiscal stimulus
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.K. headline and core CPI at 7:00 am GMT
U.K. Annual Budget release coming up
BOE Governor Bailey’s speech at 12:00 pm GMT
Fed head Powell’s speech at 12:00 pm GMT
EIA crude oil inventories at 2:30 pm GMT
FOMC member Bullard’s speech at 7:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/NZD
Pound bulls might be looking forward to another BOE hike if the U.K. CPI meets or beats expectations.
Analysts are counting on a jump from 5.5% to 6.0% for the headline figure and a climb from 4.4% to 5.0% for the core reading, likely driving up tightening expectations.
This might be enough to spur a break above the neckline of the teeny tiny double bottom pattern right at the range support at the 1.9050 minor psychological mark.
If so, GBP/NZD could find its way back up to the range resistance near the 1.9300 handle or higher. Stochastic has some room to head higher before reflecting exhaustion among buyers, so price could follow suit.
However, the 100 SMA is below the 200 SMA to hint that a bearish break is possible. The pair is also trading below both moving averages, so these could hold as nearby dynamic resistance levels.
Don’t forget that BOE head Bailey has a speech coming up, and this might also spur volatility for this GBP pair later in the day.
