FxWirePro: GBP/NZD bulls loosen their grip a bit, dips to be bought

GBP/NZD  dipped  slightly  on Tuesday as investors digested Bank of England policymaker Catherine Mann comments and awaited fresh catalyst

• Bank of England policymaker Catherine Mann warned that inflation has become embedded in the UK economy and could become more entrenched as wage negotiations intensify early next year.

• Mann said she was particularly concerned that inflation could rise to around 4% near the turn of the year, when employers typically negotiate annual wage increases. She warned that higher inflation could intensify wage pressures and make price growth more.

• The Bank of England has kept interest rates unchanged since the outbreak of the Iran war, unlike the European Central Bank and US Federal Reserve. However, markets are now pricing in a potential rate move at the BoE’s November meeting.

• Technicals leans bullish as RSI is at 71 bullish, and  9,11 and 14 DMA’s are trending up.

• Immediate resistance is located at 2.3660 (23.6%fib ), any close above will push the pair towards 2.3706 (Higher BB).

• Strong support is seen at 2.3499 (38.2% fib) and break below could take the pair towards 2.3437(SMA 20).

Recommendation: Good to buy  around 2.3600 with stop loss of 2.3500 and target price of 2.3700