Pound-to-New Zealand Dollar Week Ahead Forecast: Desperately Seeking Support

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GBP/NZD remains prone to further weakness, but a developing foothold around 2.26 is offering the market a chance to catch its breath after a sharp selloff.

The pound to New Zealand dollar exchange rate starts the new week with a modest bid, rising from the open at 2.2599 to around 2.2666 by midmorning.

For now, rebounds look corrective rather than the start of a recovery, consistent with 2026 trading patterns that show rallies tending to fade ahead of deeper declines.

The technical tone shifted decisively last week when GBP/NZD broke below its 200-day exponential moving average, flipping the outlook from bullish to bearish.

That break typically signals a change in the multi-month trend, pointing to a steady decline rather than a temporary pullback.

In the immediate term, however, the scale of the recent selloff argues for some consolidation to be considered.

Trying to catch a falling knife is notoriously risky, but the 2.26 area did provide support late last week and has acted as the platform for Monday’s bounce.

There is a reasonable chance this level holds over the coming days, allowing the market to stabilise before the next directional move.

Beyond the near-term noise, both fundamentals and technicals continue to lean toward further weakness.

The New Zealand dollar remains supported by expectations that the Reserve Bank of New Zealand will raise interest rates toward the third quarter.

By contrast, money market pricing suggests the Bank of England is likely to cut interest rates twice this year.

That diametric policy outlook represents a persistent headwind for GBP/NZD.

🎯 GBP/NZD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.

Sterling also faces rising political risk at home, adding to the pressure.

Investors are increasingly nervous that the position of UK Prime Minister Keir Starmer is becoming unstable.

Over the weekend, his closest ally, Morgan McSweeney, resigned as Chief of Staff, a development that has intensified speculation about leadership durability.

Those who have followed Britain’s recent political cycles will recognise a familiar pattern, where the loss of key aides often precedes a broader loss of authority.

Even if Starmer remains in office, markets worry he may be forced to shift policy leftwards to placate restive MPs within the Labour Party, a move seen as coming at the expense of market-friendly reform and fiscal credibility.

Technically, the setup for GBP/NZD remains bearish and argues against standing in the way of the prevailing trend.

That said, momentum indicators are becoming stretched, with the daily Relative Strength Index approaching oversold territory.

Such conditions do not preclude further losses, but they do suggest the pace of decline could slow and give way to a period of consolidation.

For now, the market appears desperately in search of support, and while 2.26 may offer temporary respite, the broader balance of risks still points lower unless the pair can reclaim its long-term moving average.

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