The GBPNZD currency pair showcased a modest, steady climb this week, marking a marginal four basis point rise.
This potential third consecutive week of gains signals a burgeoning momentum likely to persist. The ascent of the British Pound in this pairing is underpinned by economic indicators highlighting the UK’s robust economy.
Recent data, notably the S&P Global Composite PMI, unveiled a December surge to 52.1 from the previous month’s 50.7, affirming the UK’s economic resilience. This growth, primarily propelled by a thriving services sector, surpasses the crucial 50-mark, signifying expansionary progress. Such indicators serve as a testament to the underlying strength of the UK economy, consequently fortifying the British Pound’s position. This sturdy economic backdrop sets the stage for further scrutiny of the GBPNZD pair as market observers keenly track the sustained momentum and its potential impact on this currency dynamic.
Technical
The GBPNZD currency pair exhibited a notable shift after logging six consecutive days of gains, propelling it toward a 15-day peak. Initially subdued in a downtrend beneath the 100-day moving average, a sentiment switch became evident upon breaching this average to the upside.
A sharp downturn led to the establishment of resistance at the 2.05968 level. However, oversold RSI conditions prompted a reversal, finding support at the 2.00555 level and initiating a retracement.
Remarkably, this retracement extended to the crucial 61.80% Fibonacci Retracement Golden Ratio, a pivotal juncture in technical analysis. A potential retest of the resistance level seems plausible if the current upside momentum persists. Conversely, the 50% level might attract attention in a downside scenario, serving as a likely point of interest for bearish traders.
Summary
The GBPNZD pair appears poised for a potential third consecutive week of gains, bolstered by the UK’s robust economic indicators. Technical shifts, including a retracement to the crucial Fibonacci level, hint at potential a retest of resistance or downside interest at the 50% level if bearish pressures prevail.
Sources: S&P Global, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
