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With a lack of top tier catalysts on the calendar this afternoon, we’re checking out the strong momentum in GBP/NZD for potential short-term setups.

Before moving on, ICYMI, today’s Daily London Session Watch list looked at an opportunity forming on GBP/AUD after Aussie strength on positive AU jobs data,  so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

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Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:

  • New Zealand ANZ Roy Morgan Consumer confidence at 9:00 pm GMT
  • Japan inflation at 11:30 pm GMT
  • U.K. GfK Consumer confidence at 12:01 am GMT (Dec. 20)
  • China Loan Prime rate at 1:30 am GMT (Dec. 20)

What to Watch: GBP/NZD

GBP/NZD 1-Hour Forex Chart
GBP/NZD 1-Hour Forex Chart

Sterling has been in the dumps this week after the possibility of a hard Brexit returned to traders’ minds, and the recent round of net better-than-expected New Zealand economic updates have given Kiwi bulls the gumption to take back control. This environment makes this simple technical setup today on GBP/NZD the opportunity to watch for some short-term pips.

Looking ahead, there are no major catalysts are expected for either currency, but we do have some low tier events from both the U.K. and New Zealand that have a slim chance of adding some volatility. And even if they don’t bring some action, the momentum of the recent move lower in GBP/NZD may still be enough to warrant a look, especially now the pair has successfully retest the broken support at 1.9900 and reverse lower.

So, if a bear on the pair, the current technical setup is signaling time to short, and given the daily ATR of around 200 pips, bears may be look at current levels up to 1.9900 for short opportunities, especially on the higher time frames. On the daily chart, this pair is reversing at the top of a longer-term range, with the bottom being seen around 1.8400 earlier this year, making a swing / longer-term position opportunity available as well for Sterling bears and/or Kiwi bulls.