• GBP/NZD slipped lower on Friday as investors assessed the Bank of England’s next policy direction.
•This week delivered a flurry of key data, with inflation surprising to the upside on Wednesday and wage growth showing signs of moderation a day later.
• June’s inflation data from the Office for National Statistics showed the annual CPI rising to its highest level since January 2024, surprising economists who had expected it to remain steady at May’s rate of 3.4%.
• BoE Governor Bailey signaled a willingness to pursue further rate cuts if the labor market shows signs of weakening, citing economic slack and persistent inflation pressures.
• Markets are pricing in a 25 basis point rate cut by the Bank of England to 4% on August 7, with expectations that rates could decline further to 3.75% by year-end 2025.
• Immediate resistance is located at 2.2660(50%fib), any close above will push the pair towards 2.2772(Higher BB)
• Support is seen at 2.2424 (61.8%fib) and break below could take the pair towards 2.2370 (Lower BB).
Recommendation: Good to buy around 2.2490 with stop loss of 2.2400 and target price of 2.2570
