GBP/NZD Price Forecast: Bearish Momentum Still in Place
British Pound vs New Zealand Technical Forecast
GBP/NZD – Bears in Charge
On Tuesday, GBP/NZD tumbled to an over nine-month low at 1.9139 then rallied as some bears seemed to cover. Nonetheless, the weekly candlestick closed in the red with a 0.3% loss.
Sterling pound softened against major currencies on concerns about how Britain’s government will pay for its planned infrastructure program combined with unclear news about the EU-UK negotiations. Yesterday both sides met face to face for the first time after a series of virtual meetings due to the coronavirus situation.
GBP/NZD Daily PRice CHART (July 20, 2018 – June 30, 2020) Zoomed Out
GBP/NZD Daily PRice CHART (March 10 – June 30, 2020) Zoomed In
Last week, GBP/NZD failed on multiple occasions to climb to the higher trading zone reflecting that bearish bias remained intact. Yesterday the pair declined to the current trading zone 1.8964 - 1.9217.
Another close below the high end of the current trading zone signals that bears could steer GBPNZD towards the low end of the it and any further close below that level may encourage them to press towards 1.8457.
On the flip-side, a close above the high end of the zone reflects the bears hesitation and this could lead some of them to exit the market and cause the price to rally towards 1.9517. Any further close above that level may extend the rally towards 1.9761.
GBP/NZD Four Hour PRice CHART (April 22 – June 30, 2020)
On June 18, GBP/NZD resumed bearish price action and broke below the lower line of the symmetrical triangle. Yesterday, the price broke below the uptrend line originated from the June 23 low at 1.9139 and generated a bearish signal. With that said, any violation of the downtrend line originated from the June 24 high at 1.9476 would generate a bullish signal.
Thus, a break above 1.9282 could trigger a rally towards 1.9416 while any break below 1.9093 may send GBPNZD towards 1.8996. Yet, the technical levels underscored on the chart should be watched closely.
Written By: Mahmoud Alkudsi,Market analyst
Please feel free to contact me on Twitter: @Malkudsi
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.