GBPNZD briefly touched the 2.06757 support level but is now trading close to today's open (2.08440) following the Reserve Bank of New Zealand's interest rate decision and the subsequent release of UK CPI data.

The RBNZ's decision to keep its benchmark interest rate on hold at 5.5% for the 7th consecutive month, along with a hawkish statement signaling the potential for rates to remain higher for longer, has initially extended support to the NZD, temporarily driving the GBPNZD as low as 2.06757.

During today's meeting, the RBNZ committee also discussed the possibility of raising the OCR (official cash rate).

Higher interest rates may cause the GBPNZD to move lower.

However, the subsequent release of higher-than-expected UK inflation data has managed to push the pair close to today's opening level of 2.0844.

UK Inflation Data:

• Inflation YoY: 2.3% - actual; 2.1% - expected; 3.2% - previous
• Core inflation YoY: 3.9% - actual; 3.6% - expected; 4.2% - previous
• Inflation MoM: 0.3% - actual; 0.2% - expected; 0.6% - previous

From a technical perspective, the GBPNZD is currently trading below its 50- and 100-period SMAs, indicating for potential downward trend in the short and medium term.

However, the 100-period SMA is still below the current price level, suggesting a more bullish stance in the longer term.

The Relative Strength Index (RSI) is floating in neutral territory, highlighting the market's current state of uncertainty as investors await more macro data from both sides of the aisle.

On the downside, the key support level is at today's low of 2.06757, while on the upside, yesterday's high (2.08632) followed by the 21-period SMA may act as a key resistance/target level for the GBPNZD bulls.

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