GBPNZD Testing Key LevelThe sell off in GBPNZD has seen the pair collapsing by around 8% over the last month, shedding around 1600 pips! The decline has been firmly consistent with price blowing through several key support levels. The pair is now testing major support at the 1.8857 level, having broken through the rising trend line. With the retail market still heavily long there is still room for further downside in the pair on a break of 1.8857 targeting 1.8633 next.Keep An Eye OnLittle in the way of key data for either GBP or NZD over the next week. With this in mind, the focus stays on risk flows. Should risk appetite continue to pick up across next week, this should help NZD rally against GBP, pushing the pair further lower. However, if we see any reversal in risk appetite, we can expect the decline to stall and possibly reverse. Given that we are seeing strong bullish divergence in momentum studies, any reversal patterns which setup should offer the opportunity to trade a short squeeze higher so make sure to monitor price closely when/if we break the lows.
Source: Tickmill
