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GBP/NZD is on a tear to the down this week on a fundie drivers from Brexit developments and risk sentiment. More sellers ahead on the session?

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 11064.72 -1.05%
FTSE: 6958.16 +0.24%
S&P500: 2684.10 +0.11%
DJIA: 24877.07 -0.55%
US 10-yr 2.656% -0.039
Bund 10-YR 0.162% -0.025
UK 10-YR: 1.225% -0.031
JPN 10-YR: 0.01% +0.01
Oil: 54.81 +1.07%
Gold: 1328.10 +0.96%
Bitcoin: 3406.30 -1.19%
Etherium: 105.03 -3.06%

Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • German Bundesbank’s Weidmann speaks in Frankfurt at 4:00 pm GMT
  • BOC Wilkins speaks in Toronto at 5:45 pm GMT
  • Australia AIG Manufacturing Index at 9:30pm GMT
  • Japan Unemployment Rate at 11:30 pm GMT
  • Australia PPI at 12:30 am GMT (Feb. 1)
  • Chinese Caixin Manufacturing PMI 1:45 am GMT (Feb. 1)

What to Watch: GBP/NZD

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

We’ve got our eye on GBP/NZD today, which has seen strong selling pressure on the week and seems to be breaking below a period of consolidation on the one hour chart.

It’s likely the bears came out to play on Sterling after the Brexit deal amendment votes this week didn’t yield a clear path to delaying a “no deal” Brexit outcome. And it’s possible traders have been feeling bullish on the New Zealand dollar on rising global risk sentiment, sparked by yesterday’s FOMC meeting and how the market expects monetary policy to remain easy for the coming year.

With no major expected data points or events coming out for either currency in the next session or two, this momentum may still have legs. And with a daily ATR of around 180 pips, a move to the next potential support area (consolidation area around 1.8850 in early January) is not out of the question, so it’s something to consider for the bears.

For the bulls, a rise above the consolidation area around 1.9000 – 1.9050 and the falling ‘highs’ should be taken into consideration if the market can hold above that area, which is not out of the question given the right catalyst (like a fresh Brexit development), or considering we’re approaching the end of the trading week so traders may think profit taking before the end of Friday.