SUMMARY: Buy Now
Moving Average: Buy
Technical Indicators: Buy
Fundamentals GBP/NZD: Neutral/Neutral
GBPNZD Live Chart
Trading the GBPNZD
If the GBP is going to do well against another currency after Brexit it will be this one(GBPNZD).
GBPNZD Technical Review
GBPNZD weekly indicators are positive. The pair has traded sideways for more than 3 years, with resistance at around 2.08 and support around 1.92. By Following this pattern, it can be expected that the pair will soon bounce back toward the resistance level.
The daily GBPNZD chart has formed a wedge in a significant support level and has breakout toward the resistance level of 2.08.
- Short term, trade between resistance and support levels.
- Long term, accumulate small amounts. It could be a long waiting game before it turn into an uptrend. Watch out for overnight fees.
Fundamental Review by IRONFOREX
In the UK, the point of interest will be Tuesday’s 1st estimate of Q1 GDP. The forecast is for the growth rate to decelerate a bit despite the strong industrial production in January and February and robust retail sales figures in Q1. A weak growth figure along with the zero inflation rate and the uncertain political outcome in the upcoming elections could result in rate hike expectations getting pushed back even further, leaving GBP vulnerable.
The Reserve Bank of New Zealand, market expectations are for no change in rates at this meeting. Last time, they kept interest rates unchanged and signaled an extended period of steady interest rates. However, recent comments by RBNZ Assistant Governor John McDermott that weakening demand and domestic inflationary pressures would prompt the Bank to consider lowering interest rates signal a moderate shift towards an easing bias, in my view. The fall of inflation rate below the lower boundary of the range target amplifies the case for no rate increases this year. The March statement ended by saying “Our central projection is consistent with a period of stability in the OCR. However, future interest rate adjustments, either up or down, will depend on the emerging flow of economic data.” The focus tomorrow will be on whether they still see a period of stability and whether the risk of an up or down move is still evenly balanced. A formal shift to an easing bias, as seems likely to me, would probably weaken NZD, whereas maintaining the current neutral bias might cause it to strengthen.
GBPNZD is also affected by the USD and the US economic. As a secondary pair, it is heavely dependant on the USD, EUR, GBP, AUD and NZD announcement. The 200 and 50 Mov Ave which is indicatting a long term change in trend is now at risk. Higher volatility is putting pressure on the pair; but as long term view, the GBPNZD should turn into an strong uptrend. Now perhaps is the time to risk and take some long position as the pair is cheap and oversold.
Factors Influencing the GBPNZD
- Inflation Rate.
- Employment Rate.
- Monetary Policies.
- UK’s Confidence and Sentiment. Follow “Gfk Consumer Confidence” and “Nationwide Consumer Confidence”
- UK’s Balance of Payments. Follow ” Trade Balance” and “Current Account”
- New Zealand Gross Domestic Product is heavily dependent upon the agricultural products.
- New Zealand’s economic stability is directly connected to the economic conditions prevailing in Australia.
- New Zealand dollar is a commodity linked currency. If commodity prices appreciate, the price of the NZD should also increase.