The RBNZ hiked rates 25bps to1.00 and gave a rather hawkish outlook to its guidance moving forward. 

 The RBNZ hiked rates 25bps to1.00 and gave a rather hawkish outlook to its guidance moving forward. Members raised their guidance for the one- time OCR rate from2.5 preliminarily to3.25. In addition, the commission said that it'll begin reducing bond effects bought under the Large-Scale Asset Purchase (LSAP) Program in July by dealing 5 billion New Zealand bones’ worth of bonds per time and by not reinvesting proceeds from bond majorities. See our complete RBNZ recap then. As a result of the hawkish tone to meeting, the New Zealand Bone went shot. 

 

 GBP/ NZD was one currency brace that got hit due to the strong New Zealand Bone. The brace formed and reversed head and shoulders pattern during the Fall of 2021 and broke above the neckline of the pattern on December 17th, 2021, near1.9600. The target for the pattern is the height from neckline to the head, added to the rout point of the neckline. In this case the target was near2.0475. Due the anticipated jingoist of the BOE, the brace rallied and reached the target by January 28th, making a high of2.0535 on February 3rd. The brace has been moving lower since, down over 335 pips in just 2 days. 


 On a 240- nanosecond map, GBP/ NZD is running into support at the38.2 Fibonacci retracement position from the low of November 8th to the recent highs on February 3rd, near1.9893. Below there's a convergence of support at the 200 Day Moving Average ( see daily), the 50 retracement of the same timeframe, and vertical support between1.9689 and1.9713. The61.8 Fibonacci retracement is coming position of support at1.9496. Still, notice that the RSI is in oversold home, indicating GBP/ NZD may have fallen too far, too presto, and may be ready for a brio. First resistance is at the February 22nd highs of2.0227. Above there, price can retrace back to the highs of February 3rd at2.0535. 

 

 The RBNZ raised rates and continued with its hawkish tone. As a result, the New Zealand Bone went shot and dragged GBP/ NZD down. Still, the coming BOE meeting is on March 17th. Recall that the BOE was also hawkish at the last meeting on February 3rd, as they nearly hiked 50bps. Not much has changed on that front. Watch the Fibonacci retracement situations below current price for possible areas where GBP/ NZD may break or reverse, especially as we get near to March 17th! 

.