- GBP/NZD is extending downside for 2nd consecutive session after being rejected at 50-DMA.
- The pair has slipped below 5-DMA and has broken 1.90 handle, bias still lower.
- Kiwi buoyed by solid China services PMI which printed at 53.9 in Dec, beating expectations at 51.8 and compared to 51.9 in the previous month.
- A positive Chinese services PMI print followed the release of upbeat Chinese Caixin manufacturing PMI yesterday, lifted sentiment around the antipodeans.
- Stiff resistance seen at 50-DMA at 1.9215. Breakout could see further upside.
- Technical studies neutral, but bearish divergence on RSI and Stochs keeps scope for downside.
- We see minor trendline support at 1.90, weakness to extend on break below.
Support levels - 1.8929 (cloud base), 1.8883 (38.2% Fib retrace of 1.73375 to 1.98383 rally), 1.8767 (100-DMA)
Resistance levels - 1.9046 (5-DMA), 1.9208 (50-DMA), 1.9233 (cloud top), 1.9248 (23.6% Fib retrace of 1.73375 to 1.98383 rally)
Recommendation: Good to go short on decisive break below 1.90, SL: 1.9050, TP: 1.8930/ 1.8885/ 1.8770.
FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -58.8797 (Neutral), while Hourly NZD Spot Index was at 133.713 (Bullish) at 0840 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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