• GBP/NZD fell on Friday as pound weakened after a report the UK budget will not include income tax rises.
• Media reports showed that British Prime Minister Keir Starmer and Finance Minister Rachel Reeves have abandoned plans to raise income tax rates, marking a sharp shift just weeks ahead of the November 26 budget.
• Reeves may need tens of billions to meet her fiscal goals, and her comment that “we will all have to contribute” was seen as hinting at a possible break from the election pledge on income tax.
• News of the policy shift, first revealed by the FT on Thursday night, sent pound tumbling Friday.
• Immediate resistance is located at 2.3285 (38.2% fib), any close above will push the pair towards 2.3520 (23.6% fib).
• Immediate support is seen at 2.3153(SMA20) and break below could take the pair towards 2.3091 (50%fib).
Recommendation: Good to sell around 2.3200, with stop loss of 2.3300 and target price of 2.3120
