When multi-year correlations brake down its best not to fade them as a lot of people have probably been trading off those correlations for a very long time and are now caught and hence start to panic and when the crowd panics you can have very large moves. When "spread's" blow out it can be horrendous so just be careful. I would like to outline this is not a true spread but a correlation trade but people do have these random correlation/spread's on and the same applies.
At the same time BoE is sounding a lot more Hawkish so it isn't wise to be shorting the Pound (£) at the preset time as it looks to be breaking out as there is a clear trend appearing to the upside. Also it would not be wise shorting it against NZD as the NZD/USD can't seem to be holding a bid at the moment from a daily perspective and especially on a US bank Holiday when the Dollar is weak against almost everything else. There are times to be a contrarian but I believe it is not wise to be at the present time in GBP/NZD just taking into account what I have just said, there will be a time to mean revert it but not right now. At least wait for a close below 2.0000 on the daily so you can quantify your risk and confirm more range play. From the weekly perspective it looks like a very deformed inverted head and shoulders with a very large target. I would personally wait for others to sell in front of what looks like a train and see how they fair first and just wait and see as the market if it does turn will give you a second chance to sell where you know where your risk is as it just looks like blind selling with a stop about 1000 pips higher. But good luck!
At the same time BoE is sounding a lot more Hawkish so it isn't wise to be shorting the Pound (£) at the preset time as it looks to be breaking out as there is a clear trend appearing to the upside. Also it would not be wise shorting it against NZD as the NZD/USD can't seem to be holding a bid at the moment from a daily perspective and especially on a US bank Holiday when the Dollar is weak against almost everything else. There are times to be a contrarian but I believe it is not wise to be at the present time in GBP/NZD just taking into account what I have just said, there will be a time to mean revert it but not right now. At least wait for a close below 2.0000 on the daily so you can quantify your risk and confirm more range play. From the weekly perspective it looks like a very deformed inverted head and shoulders with a very large target. I would personally wait for others to sell in front of what looks like a train and see how they fair first and just wait and see as the market if it does turn will give you a second chance to sell where you know where your risk is as it just looks like blind selling with a stop about 1000 pips higher. But good luck!