FxWirePro: GBP/NZD downside pressure builds, key support level in focus

• GBP/NZD fell on Tuesday as renewed fiscal concerns pressured sterling following reports that the Office for Budget Responsibility (OBR) plans to cut its productivity growth forecast.

• Britain’s budget watchdog is likely to reduce its productivity projection by approximately 0.3%, implying a £20 billion shortfall in government finances.

•The downgrade heightens pressure ahead of next week’s Bank of England policy meeting and the autumn budget.

• The Bank of England is expected to hold interest rates steady at 4.00% at its November 6 meeting, with a slight majority of economists surveyed anticipate no additional rate cuts this year.

• Traders continue to price in a 35% chance of a BoE rate cut at the next meeting, with money markets expecting the base rate to fall around 20 basis points below the current 4% level.

• Immediate resistance is located at 2.3178(38.2%fib), any close above will push the pair towards 2.3210(SMA 20).

•Support is seen at 2..2922 (50%fib) and break below could take the pair towards 2.2862(Lower BB).

Recommendation: Good to sell around 2.2980 with stop loss of 2.3060 and target price of 2.2880