Pound-to-New Zealand Dollar Week Ahead Forecast: Vulnerable to Further Losses

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The pound to New Zealand dollar exchange rate (GBP/NZD) remains vulnerable to further losses in the week ahead, despite a modest rebound from recent lows.

GBP/NZD is trading around 2.2757 after rebounding from a multi-month low at 2.2628 reached on Friday, a move that appears more consistent with consolidation than a change in direction.

Price action suggests the pair has entered a pause phase, but with the broader outlook still tilted to the downside.

A key technical shift occurred last week when GBP/NZD fell below its 200-day exponential moving average, an indicator widely used to distinguish between medium-term uptrends and downtrends.

A sustained break below this level typically signals that sellers have regained control, tilting the medium-term bias from higher to lower and making rallies more vulnerable to renewed selling.

Momentum indicators echo that message, with the Relative Strength Index touching 30 last week, confirming oversold conditions.

While the RSI has since lifted out of oversold territory, it has yet to turn decisively higher, suggesting downside pressure has eased but not reversed.

Near-term support is being provided by the 2.2695 area, a graphical level that has so far defended the exchange rate against further weakness.

A clear break below that support would open the way toward the 2.24 region, marking the next meaningful downside target.

For the technical outlook to turn more constructive, GBP/NZD would need to recover above the 200-day EMA, currently located around 2.2856.

Beyond the charts, the New Zealand dollar has been supported by shifting interest rate expectations, with both New Zealand and Australia increasingly seen as candidates for future rate hikes.

Above: NZD is the best performing G10 name over the past month.

The Reserve Bank of Australia is expected to raise interest rates as soon as Tuesday, reinforcing the sense that the interest rate cycle is now turning more supportive for the antipodean currencies after a prolonged period of headwinds.

While the Reserve Bank of New Zealand is still some distance away from its next rate increase, the New Zealand dollar has also benefited from a substantial unwind in short positioning.

Those short positions built up over the past two years during a period of persistent NZD underperformance, and their partial reversal has provided an additional tailwind.

The key question for the outlook is how much of that positioning adjustment is now complete, as a more balanced market could see the New Zealand dollar’s recent momentum begin to fade.

For now, however, the technical damage to GBP/NZD keeps risks skewed to the downside, with rebounds likely to be treated as corrective unless the pair can reclaim its long-term moving average.