GBP/NZD has seen a sharp drop from mid-February’s 2.0534. The drop is starting to see initial but tentative signs of stability. A fully throttled 1.764% Fibonacci extension can eye a retest of last November’s 1.8854 lows, Benjamin Wong, Strategist at DBS Bank, reports.
Downward pressure to abate
“On the daily Ichimoku chart, the technical indicators are starting to signal tentative and light signs of stability. Nonetheless, the moving average convergence divergence signal has yet to deliver an affirmed turnaround. Hence, the market can push towards 1.8871 or more – this price zone calibrates the 1.764% price extensions of the break of a 1.9944 neckline in late February.”
“Over the course of time, 200-day moving average has been a useful guide in placing localised shifts in direction hence 1.9660 should at least exert an influence in any price recovery.”
“Downward pressure remains relevant, and this could still lead GBP/NZD lower to retest last November lows placed at 1.8854. Thereafter, we will wait for this pressure to abate; after all seasonality going into April favours a more constructive outlook.”
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