GBP/NZD continues to dive with Brexit concerns at the top of the agenda

• GBP/NZD trades 0.82% lower on Wednesday as Brexit woes bite.
• The pair is currently testing a strong support zone at 1.9430.

Fundamental backdrop

The chance of a no-deal Brexit look like a real possibility as talks stumbled once again. It seems that plans are being made for that eventuality as the UK Business Minister Sharma said the UK will follow WTO subsidy rules after the end of the transition period. He then went on to say "The UK will adhere to any international obligations on subsidies agreed under future free trade agreements". The good news is that EU will not seek to suspend Brexit negotiations over new the UK internal market bill which is said to have broken international law.

GBP/NZD daily chart

Looking at the chart, the price has tumbled very quickly recently. Today looks like it will mark a fourth straight losing session. The current support zone is pretty strong and it will be interesting to see if the price will close below the level at 1.9430. If it does, then the 1.90 psychological level could be next. In between those two zones, there is also a black trendline which could also be a sticky point.

The indicators are also painting a bearish picture. The Relative Strength Index is firmly below the 50 area and looks set to hit the oversold area. The MACD histogram is red and the signal lines are currently crossing the mid-zone to the downside.

Additional levels