Since the reversal to the upside on the 12th of December, GBP/NZD has been on a steady move higher, trading above a newly-formed short-term upside support line, taken from the low of the same day. Certainly, as long as that upside line remain intact, we will continue aiming higher. But one should remain slightly more on the cautious side, as our short-term momentum studies have turned south, signalling slowing upside speed.
If GBP/NZD makes a push higher and breaks the 1.9050 barrier, marked by yesterday’s high, this may invite the bulls back to the table and the pair could travel further up. This is when we will start examining a possibility for the rate to climb to the 1.9200 hurdle, a break of which might increase the chances for GBP/NZD to move towards the 1.9283 obstacle. This is the area where the pair got held from moving higher on the 13th of November.
As mentioned previously, it seems that our oscillators signal weakening momentum. That said, the RSI is still hanging above 50, which gives hope for the buyers. The MACD, after falling below its trigger line yesterday, still remains above the zero line, which also gives a bit of hope for the bulls.
Alternatively, a break of the aforementioned short-term upside support line and another drop below the 1.8860 zone, could question the potential upside, at least in the short run. This is when we will target the 1.8735 obstacle, a break of which may lead the rate lower, where the next good area of support might be seen between the 1.8625 and 1.8600 levels. The first acted as good support on the 20th of December, and the second, as strong resistance on the 14th of the same month.
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