GBP/NZD traded higher during the Asian morning Friday, after hitting once again support at 1.9110 during the US session yesterday. Since Apr. 14, the rate has been trading in a trendless mode, between that barrier and the 1.9480 hurdle, and thus, for now, we will hold a neutral stance with regards to the short-term picture of this exchange rate.
That said, given that the overnight rebound from 1.9178 was the fourth since mid-April, we would see decent chances for further recovery. Initially, we may see a test near yesterday’s high of 1.9335, the break of which could extend the advance towards the 1.9435 barrier, marked by Wednesday’s peak. Slightly higher lies the upper end of the range, at 1.9480, which marks the high of Tuesday and may provide additional resistance.
Taking a look at our short-term oscillators, we see that the RSI rebounded, and although it is still below the 50 line, it seems ready to cross higher soon. The MACD is below both its zero and trigger lines, but it has bottomed as well. Both indicators suggest that the downside momentum is diminishing, and that the rate may start picking upside speed soon. That’s why we see decent chances for further recovery within the current sideways range.
Now, in order to start examining whether the short-term outlook has turned negative, we would like to see a dip below the key support of 1.9178. This will confirm a forthcoming lower low on both the 4-hour and daily charts, and may initially pave the way towards the low of Mar. 3, at 1.9110, or the low of Mar. 1, at 1.9083. If those zones are not able to halt the slide and break, the decline may extend towards the psychological round figure of 1.9000.