Brexit has been a buzz word as of late in the market, but rightfully so as the U.K. show continues to leave traders miffed as to what may be the next actual steps. Currently, there are large proposals and it seems that Britain will indeed leave the Euro-zone and there is pressure internally to speed up the process. The bizarre thing has been that we have seen an upswing in economic activity as of late as the UK economy has been faring much better than many expected as Manufacturing PMI lifted to 55.4 (52.1 exp)  and Construction PMI also lifted to 52.3 (exp 49.0). This has been somewhat unexpected, but it shows the UK is stronger than many had expected. However, the market has decided otherwise and the GBPUSD has dropped sharply on the charts on the back of the recent Brexit talks at the end of the day.

After hitting a 31 year low it’s hard to tell where is the next direction for the GBPUSD. The safest way to forecast a low here or any level of support is to aim for psychological levels. In this case 1.2700 looks likely to be the next major level as the market tries to find a bottom. The other point to make is that the market is shifting lower but it will also be trending and a channel is starting to form with resistance likely to be dynamic and following with the trend lower in the long run. Either way it’s likely the market will look to find support soon and may look to sell-off some of the recent gains that traders have had.

The kiwi dollar has taken another tumble on the charts today as the global dairy auction showed a drop for prices slipping 3%, which in turn caused traders to act aggressively and sell of the NZDUSD. For some time now the market has been banking on a push higher for milk prices in order to achieve a recovery in the NZ economy, even the Reserve Bank of New Zealand has looked as so far to cut interest rates after imposing exotic measures to control the housing market. This was coupled with the RBNZ trying to jawbone the market in the previous week in an effort to push the currency market lower, but with very little success.

The NZDUSD has been struggling to make any gains as of late and the global dairy auction lead to some sharp falls in the marketplace. The current 100 moving average is trending upwards and looking likely to touch support at 0.7180. While we could see some pull backs from this level, it’s likely the NZDUSD may trend lower if the US dollar continues to remain relatively upbeat and a little less bearish as of late. The real question will be if the NZ economy will continue to struggle, if so then I would expect further falls for the NZDUSD to support at 0.7113