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- GBP/NZD techs point higher near-term
- But range of past month likely to be respected
- NZ business surveys to feature this week
There is potential for a short-term break higher in the Pound-to-New Zealand Dollar exchange rate, according to the latest technical analysis conducted by Autochartist.
Autochartist is a technical analysis provider, that aims to predict near-term moves in various exchange rates based on chart patterns and levels.
The findings on Monday morning are that Sterling is a 'buy' against the New Zealand Dollar, owing to the GBP/NZD exchange rate having successfully broken through a negative price pattern known as a Falling Wedge.
Specifically, GBP/NZD has broken through the resistance line located between 2.0012 and 2.0020, leading Autochartist to say, "a possible bullish price movement forecast for the next 8 hours towards 2.0046."
While the short-term outlook (covering the next 24 hours) might be supportive for Sterling against its New Zealand counterpart, the multi-day outlook suggests the exchange rate is likely to retain a rangebound tone.
The Pound-New Zealand Dollar exchange rate is trading at 2.0011 at the time of writing on Monday, with the pair looking to maintain levels between 2.0011 at the bottom and 2.0339 at the top:
If we look at the above we can see that the exchange rate is currently trading towards the lower end of the range, and therefore, based on the performance of the past month, we could well expect support at 2.0011 to perhaps kick in.
This support seen on the daily chart, could well coincide with the technical patterns identified by Autochartist in their multi-hour analysis.
Regardless of whether or not these views are in fact met by the GBP/NZD exchange rate, we can be sure that the pair will ultimately remain relatively well supported in the near-term, provided no major surprises are forthcoming from the UK General Election campaign.
Sterling is currently finding support on the lead being enjoyed by the incumbent Conservative Party in the polls, and we we would expect any weakness to ultimately be shallow unless a major turn around in fortunes is recorded.
New Zealand this Week
On the domestic Kiwi scene, markets will be eyeing the following:
Retail Sales – Monday 25 November, 21:45GMT.
"A robust household sector is one of the bright spots in this increasingly uncertain environment. Don’t fail us now. We’ve pencilled in a 0.8% q/q lift in sales volumes," says Sharon Zollner, Chief Economist at ANZ Bank.
RBNZ Financial Stability Report - Tuesday 26 November, 19:00GMT.
"The FSR will likely conclude the financial system remains resilient, but also contain a plug for the value of higher bank capital. We think that retaining current LVR settings would be prudent at this point," says Zollner.
Overseas Merchandise Trade – October Tuesday 26 November, 21:45GMT.
"We expect an unadjusted trade deficit of $800 million, with exports coming in at $5.2bn and imports at $6.0bn. This would see the annual deficit narrow $0.5bn to $4.7bn," says Zollner.
ANZ Business Outlook – Thursday 28 November, 00:00GMT.
ANZ-Roy Morgan Consumer Confidence – Thursday 28 November, 10:00am.
Building consents – Thursday 28 November, 21:45am.
"Consents have held at a high level recently, but we see limited room for further strong growth from here," says Zollner.
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