GBPNZD Testing Key Level
GBP has been back in demand following the BOE’s rates move yesterday. While the decision is being somewhat overshadowed by the risks around Omicron in the UK, there is still plenty of upside potential for GBP should lockdowns be avoided in the coming months. With the BOE sounding broadly upbeat about the economy, while acknowledging the risks from omicron, the big focus now is on how the pandemic progresses over the winter months. If hospitalisations stay relatively low and the UK can avoid going back into lockdown there is room for GBP to trade higher as we approach the next BOE meeting in February.
Meanwhile, NZD is bearing the brunt of the current Dollar rally much more than GBP. Additionally, given the country’s record, the risk of returning to lockdown is much higher in New Zealand should omicron start to take hold. In such a scenario, RBNZ rate hike expectations will likely be pushed out further into next year. Near term, there is scope for GBPNZD to advance.
Technical Views
GBPNZD
The current price action looks vulnerable to an upside break here. Following the correction lower from 1.9690 price is now putting pressure on the level again, looking for a resumption of the bull move off the YTD lows. Looking at the larger picture we can also see an inverse head and shoulders pattern with 1.9690 the neckline of the pattern. With more than 70% of the retail market short, there is ample room for a break higher here. Above 1.9690, bulls can target a move up to 2.0064 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.