FxWirePro: GBP/NZD under pressure as UK inflation cools, political risks rise

• GBP/NZD slipped lower on Wednesday as softer domestic inflation, fiscal concerns, and political uncertainty pressured the pair.

• British inflation cooled more than expected in April, but the relief is likely temporary as rising global costs from the Iran war are expected to put more pressure on households later this year.

• Official data showed consumer prices rose 2.8% year-on-year in April, easing from 3.3% in March.

• Softer-than-expected UK CPI and RPI figures sharply lowered expectations for a June Bank of England rate hike, with markets pricing the odds near 20%.

•Meanwhile, Middle East conflict overhang, severe domestic headwinds, and more hawkish Fed policy expectations GBP/NZD risks remain considerably skewed to the downside.

• Immediate resistance is located at 2.2904(SMA 20), any close above will push the pair towards 2.2995 (38.2%fib).

• Immediate support is seen at 2.2762(38.2%fib) and break below could take the pair towards 2.2681(Lower BB).

Recommendation: Good to sell around 2.2910  with stop loss of 2.2980 and target price of 2.2800