The GBP/NZD could be in store for quite a fireworks display. The daily chart is in a triangle, and with tomorrow’s “Inflation Report” from the BOE the GBP could stage a big move. Bullish or bearish, but the implications for the GBP/NZD could be good.

If the BOE is a little more hawkish on future inflation (like the FOMC) we could see a squeeze higher in the GBP/NZD to test the recent highs at 2.1050 (approximate). Often, false breaks (like the highlighted breakdown) could lead to a big reversal (higher in this case). You may recall this post of the highlighted area in January.

In the event the 2.1050 level breaks, the longer term outlook could be very bullish. Keep in mind if the market starts to price in hikes from the BOE (again) and perhaps future cuts from the RBNZ (???) then the chart below is a huge possibility:

Blake Morrow

Chief Currency Strategist, Wizetrade

Disclaimer: I have been building a long position since below 2.000 GBP/NZD spot