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The pound to New Zealand dollar (GBP/NZD) is settling higher following the frantic selloff of October.

GBP/NZD zoomed to 2.3520 last month before tripping over itself and landing in a heap at 2.2806. It's now in the process of dusting itself off.

This attempt to regain composure is highlighted by the mini rally towards the nine-day exponential moving average (EMA) at 2.3042 that is underway.

In fact, the current price action is quite illustrative of how our Week Ahead Forecast model works:

We tend to view big divergences in an exchange rate away from the nine-day EMA as indicative of a move that's gone too far. (We think it offers a more useful indicator of oversold conditions in shorter-term timeframes than the RSI does.)

What we saw last week was a classic case

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