FxWirePro: GBP/NZD bounces off daily cloud, retrace above 50-DMA could see further upside

• GBP/NZD trades in narrow range, capped below 50-DMA at 1.9138.
   
• The pair has bounced off support at daily Ichimoku cloud, weakness to extend only on break below.
   
• Bearish divergence on RSI and Stochs keeps scope for downside, Technical studies are also biased lower.
   
• Indicators on weekly charts have turned slightly bearish. Stochs and RSI are showing a rollover from overbought levels.
   
• We see bearish invalidation on retrace above 50-DMA, scope then for test of 20-DMA at 1.9374.

Support levels - 1.8992 (cloud top), 1.8883 (38.2% Fib retrace of 1.73375 to 1.98383 rally), 1.8785 (Nov 9 lows)

Resistance levels - 1.9119 (5-DMA), 1.9138 (50-DMA), 1.92488 (23.6% Fib retrace of 1.73375 to 1.98383 rally)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-GBP-NZD-holds-50-DMA-support-at-19121-break-below-to-see-further-weakness-1060976) is progressing well.

Recommendation: Bias lower, stay short.

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -106.997 (Bearish), while Hourly NZD Spot Index was at 6.12415 (Neutral) at 0600 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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