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The Pound is broadly higher on Monday.
The Pound to New Zealand Dollar exchange rate (GBP/NZD) is rising back into its 'comfort zone'; the range it has occupied for the majority of this year between 2.2780 and 2.2243.
GBP/NZD dropped 0.70% last week, taking it below the nine-day exponential moving average (EMA), something that typically spells the start of a short-term downtrend.
The selloff suggested a retest of support down at 2.2243 was in contention, with a view to a potential breakdown given the supportive mood music on tariffs that would tend to bolster the NZD.
However, gains on Monday of half a per cent in GBP/NZD means the pair is back in touch with that nine-day EMA, sapping momentum from the nascent selloff.
This is a pair that is firmly wedged in a range and the flat RSI and there is simply no desire to break higher or lower. The net result is that it looks as though the market is oscillating and reflexing back to the upper half of the range, which puts 2.26 in scope for this week.
Gains for GBP/NZD come despite an EU-U.S. trade accord being reached on the weekend, price action that surprises us as it would be the NZD that tends to benefit the most when trade tensions fade.
Indeed, the GBP/NZD drop that we saw last week came on the back of the Japan-U.S. accord and a growing confidence that the EU would be next to seal a deal.
Perhaps then the GBP/NZD rally on Monday is something akin to a 'buy the fact' reaction: the Pound Sterling is one of July's worst-performing major currencies, and some counter-trend profit-taking was always going to be a risk into month-end.
So for now, we look at GBP/NZD's gains as being technical, as the fundamentals suggest it should be the NZD that is outperforming.
Should a confirmed break below 2.2254 occur we would become more convinced that the market was starting to trend lower and that the longer-run rally has finally come to an end.
Until then, we're melting up in a listless, albeit somewhat predictable, sideways oscillation.