FX:GBPNZD British Pound/New Zealand Dollar
The GBP/NZD cross has staged an impressive 12-week rally, the second half of which has mostly been through selling pressure on the NZD following the RBNZ's recent rate cut decision. The is currently suggesting a downside risk as the is starting to form a negative divergence. This divergence still has to be confirmed, and a daily close below 2.218 today would increase significantly the likelihood of such a confirmation. If this divergence is indeed validated, prices should fall back to around 2.27 by early next week. It's imperitive that the GBP/NZD breaks below 2.31 in the next 2-3 days for this divergence to really allow traders to remain against the overall trend here. I wouldn't be keen on holding shorts if prices don't break below this level fast enough.