This forex pair just busted through a strong resistance zone!
Can it go for a pullback when China’s inflation reports are printed?
Market players seem to be pricing in downbeat CPI and PPI data, which might then ramp up the odds of more stimulus.
GBP/NZD: 15-min
GBP/NZD appears to be finding resistance at the 2.1050 minor psychological mark near R2 (2.1030) and could go for a retracement to the Fibonacci levels.
The 38.2% Fib is close to R1 (2.0980) and the 2.1000 major psychological handle, which could be enough to keep losses in check.
A much larger pullback could reach the 50% Fib at 2.0950 or the 61.8% level that’s in line with the former resistance zone, the dynamic support at the moving averages, and the pivot point (2.0910).
If any of these hold as a floor, GBP/NZD could resume the climb to the swing high and beyond!
Investors are already on the lookout for more easing efforts or some form of intervention from the PBOC, and these typically result to rallies for commodity currencies like the Aussie and Kiwi.
Earlier this week, China released upbeat trade data, casting doubts on whether or not the government might still pursue its stimulus plans.
If the CPI and PPI figures disappoint and the Chinese government or central bank remains vague on their economy-boosting deets, we might see a quick rally then reversal for the Kiwi right around the potential support zones of this pair.
Don’t forget to account for the average GBP/NZD volatility when setting entries and exits!
