The Pound-to-New-Zealand-Dollar Rate Week Ahead Forecast: Range Breakout is Imminent

The Pound-to-New Zealand-Dollar rate remains stuck in a tight range but the formation of a narrowing triangle pattern on the charts suggests a breakout is now in the cards.

The New Zealand Dollar has recovered from two-year lows strongly this week in response to signs of a "trade war" detente between the US and China, but analysts from Bank of New Zealand (BNZ) say it could have further to run in the months ahead. 

The Pound may rise against the New Zealand Dollar over the short-term because charts are showing the formation of a bullish set-up.

GBP/NZD potentially completing a triangle pattern which will probably breakout soon but there is uncertainty as to whether the break will be higher or lower.

The New Zealand Dollar crumbled Thursday after the Reserve Bank of New Zealand (RBNZ) told markets that Kiwi interest rates will remain at their current record lows for longer than even the most downbeat of analysts had previously expected.

Technical conditions and the potential for disappointment at this week's RBNZ meeting are creating the perfect conditions for a possible broad decline in the new Zealand Dollar.

GBP/NZD is oscillating within a narrow range in a week when there is plenty of potential for volatility with the pair having formed a compelling triangle pattern which will probably breakout soon. Fundamentally speaking, the RBNZ rate meeting poses the biggest risk.

The New Zealand Dollar weakened into the London session Wednesday after a mixed second-quarter labour market report failed to provide the Kiwi currency with inspiration for another move higher.