After the GBP/NZD currency pair recorded its highest level this year at 1.8945 in May it turned back to decline by more than 1600 pips and it’s now trading 1.7700. Today the pair slipped down after the negative CPI data from the UK released this morning came at 2.6%, less than the forecasted 2.7%.
The GBP/NZD pair is trading in a series of corrective waves to exceed the 61.8% Fibonacci. Then it would move between 61.8% and 50% and it’s expected that it will rise in the next trading days to mark new highs this month. If we take a look at the chart below we would recognize a tow bottom pattern (which is a reversal pattern), which may change the market direction to the upside - that is in case the prices break the neckline at 1.7885.
The Next Few Days
From this simple analysis of the pair we can buy it now at the current level at 1.7700, keeping our target at 1.7850. We have to go out of the market and wait for the breaking up from the neckline and take another buy position, keeping our target at 1.8230 in case the pair is still trading above the trend line.
This week the market has some hot news from the UK like the Average Earnings Index and the retail sales and has no news from New Zealand except the GDT price index.
