Despite the weakening after the BoE meeting, the pound remains resilient, especially in the main cross-pairs, including the New Zealand dollar.
Meanwhile, the past week was disappointing for the NZD and its buyers.
Data published last Wednesday reflected the deterioration of GDP dynamics: in the 3rd quarter, the New Zealand economy growth slowed by -1.5% after a decline of -0.5% in the previous quarter (in annual terms), stronger than the forecast of -0.4%.
The economic recession observed in New Zealand has increased expectations of a rate cut by the Central Bank of New Zealand, which, in turn, undermines buyer interest in the NZD. At the moment, market participants are expecting another interest rate cut in the country by 0.50% at the RBNZ meeting in February. It is likely that the New Zealand dollar will remain under pressure until this event.
For the third month in a row, GBP/NZD has been trading in the global bull market zone, above the 200-period moving average on the monthly chart and the 2.1110 mark.
The advantage is for long positions.
The first signal for new long positions may be a breakout of today’s maximum of 2.2280, and the target is the upper border of the ascending channel on the daily chart, passing through the 2.2500 mark. A more distant growth target is the upper border of the ascending channel on the weekly chart and the 2.2700 mark.
Meanwhile, one of the shortest weeks of the year has begun – Christmas. On the night of December 24-25, Christians, mainly in Catholic countries, will celebrate the Nativity of Christ. There will be few publications of macro statistics, trading volumes will be low, and the market will be “thin”. Trading will be fully restored already in the first full trading week in January.
Support levels: 2.2140, 2.2085, 2.2000, 2.1900, 2.1787, 2.1705, 2.1580, 2.1505, 2.1395, 2.1275, 2.1230, 2.1100, 2.1000
Resistance levels: 2.2280, 2.2300, 2.2400
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