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.
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.
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
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