GBPNZD Archives - Page 3 of 9

September 14, 2016September 14, 2016

Is She Baaaa-ack?

The new trading week is packed with market-moving economic releases out of the UK. Inflation, the UK jobs report and retail sales are all released ahead of the event risk of the week. The event risk of the week for the Great British pound is the BoE interest rate announcement. All of these releases will give a better picture of the British economy in the aftermath of the Brexit shock. It is very likely that these releases are more robust than the market expects. If so, the BoE will not have a reason to move on monetary policy this week causing the Great British pound to rally further. More sterling strength will allow the pound currency pairs to finish consolidation just as the summer doldrums have officially come to an end.

How shall we trade the GBP this week?

Well, we came into the week with a ton of GBP strength.

With CPI and regular wages both weaker than expected, inflation is not raging at all in the British economy.

Great Britain average earnings annual growth rates, seasonally adjusted. *Source: UK ONS*

The lack of inflation in wages, though still relatively high, will keep the BoE away from any tightening measures. Coupled with weak consumer prices, the BoE may signal a further loosening monetary policy this week. As such, the GBP strength that started the week is starting to fizzle as we get closer to the actual Bank of England announcement this week. The Friday close will be significant for direction sterling into the end of the year. The summer is officially over. Volatility and traders are back and with them a clear trend is likely to emerge.

February 22, 2016February 22, 2016

ON AIR with FXStreet’s Live Analysis Room #FXRoom

GBP has gapped down across the board and the follow through right now is tremendous. I talked with Dale Pinkert, host of LAR #FXRoom, about the Brexit and the levels to watch that $GBPUSD and $GBPNZD. These levels are being challenged right now as the new trading week gets underway.

It’s already Monday and the Friday close is already so important. Neither bears nor bulls should get too excited with these opening flows. Anything can happen this week. Trade it well!

Premium trade setups with targets and stops are published in the Quid Report.

October 28, 2015October 28, 2015

Kiwi May Fly, But Stuck For Now

In light of the substantial dip lower in dairy prices last week, this week’s interest rate announcement from the Reserve Bank of New Zealand (RBNZ) should be given attention. If the RBNZ expresses caution about dairy and commodity prices, the New Zealand dollar will weaken. Dairy prices led other commodities with a bottom over five weeks ago. This consequently exhausted buying momentum in the $GBPNZD due to NZD strength. The decreasing momentum allowed the $GBPNZD to break lower in the past four weeks of trading. The new lows find support ahead of the large 50% Fibonacci level at 2.2307. The correction higher into the sell zone also finds resistance against the 2.3000 psychological level. The confluence here makes a break above the 2.3000 level a significant technical development. However, this may not be likely if the RBNZ remains neutral in sentiment and monetary policy. Rather, the $GBPNZD is carving out a range for itself between the 2.3000 level to the upside and the 2.2400 level to the downside. A break to the downside could potentially be a false break with the 50% Fibonacci level just below the support level at 2.2307. Therefore, the $GBPNZD may continue range bound for the week depending on how the market reacts to the RBNZ and Federal Reserve interest rate announcements.

OUTLOOK FOR THE WEEK….

This is an excerpt from this week’s issue of QUID REPORT. Subscribers receive my research on all major GBP pairs at the beginning of the week, including access to @faithmightfx on Twitter for daily, real-time updates to the weekly report. AVAILABLE NOW.

October 4, 2015

Is This The Bottom?

Last week, I was on the air live with Dale Pinkert, host of FXStreet’s Live Analysis Room. My episode is down below. It’s always fun talking GBP with Dale because he always has insights to share with me as I do with him. His experience in futures on top of the forex always leads to a good conversation. The interview never feels like an interview. Just good trading talk between friends.

The interview took place the day before the September non-farm payrolls dropped. You’ll hear us talk equities quite a bit. With the weakness in the $SPX, I explain why the $GBPJPY was actually looking to fall further to 174.86 and possibly even as low as 167.99. But the weakness in the NFP report may change everything. Apparently, Yellen and the $FED did know something we all didn’t know. The recent global malaise in China, Syria and Brazil are, in fact, starting to show ripple effects in the U.S. economy. And if this economic weakness becomes a trend, interest rate hikes out of the Federal Reserve are off the table. Probably completely. Definitely for 2015. The lack of wage growth and the less-than-expected jobs growth has finally convinced markets that the $FED is not moving on interest rates. In fact, whispers of QE4 are back. Expect that drum to beat louder if the U.S. economy starts to show more weakness in the months ahead.

Looking at the $GBPJPY as our equities proxy, the Friday close above the 181.00 support level is a bullish signal in light of the strong close in the S&P 500. Watch here:

June 12, 2015June 15, 2015

RBNZ Ushers in More Kiwi Weakness

The $GBPNZD continued its move higher last week by extending the rally to new highs at 2.1709. Since the breakout rally took out the former highs on both the daily and weekly charts, we must look to the monthly chart for the potential of a continuation higher. Looking at the monthly chart, the importance of the 2.1050 level is significant for future direction. After finding resistance at the 2.2050 level back in, the $GBPNZD made many attempts to move lower. Soon the $GBPNZD was trading in a huge range between 2.1050 and 1.9250. The past two months found price holding the bottom of that range to breakout above the range top. With a confirmed close above the key 2.1050 level, the $GBPNZD has potential to move higher still. The next major level of resistance is found just above the major 2.2000 psychological level.

While the breakout of last week took price to new highs, momentum, on the other hand, did not follow suit. The RSI shows a bearish divergence on the daily chart at the highs. This divergence has the potential to push price lower into the buy zone marked by the Fibonacci levels of the latest bullish wave. Though the 2.1050 level is a key level for direction, it is the 2.0800 level that must hold as support for the $GBPNZD to maintain its bullish bias.

This is an excerpt from this week’s issue of Quid Report. Subscribers receive my research on all major GBP pairs at the beginning of the week, including access to @faithmightfx on Twitter for daily, real-time updates to the weekly report. AVAILABLE NOW.

April 29, 2015June 15, 2015

My Appearance on FXStreet’s Live Analysis #FXRoom

It was FOMC DAY in the #FXRoom yesterday. A big day for a big interview and Dale Pinkert (@forexstophunter) at FXStreet didn’t disappoint. We talked about the how the $FED may effect markets just a few hours later. I run through some chart art on the $GBPUSD, $EURGBP, $GBPJPY, $GBPAUD, and $GBPNZD. This is my 1st interview since launching Quid Report. So I basically talk through this week’s issue giving traders a sneak peek into my new project. Enjoy the video!

Broadcast live streaming video on Ustream

April 15, 2015June 15, 2015

QUID REPORT – NOW AVAILABLE

Election jitters played out in trading last week as the GBP weakened across the board. Economists and financial media took to extreme headlines about sterling volatility spiking due to the uncertainty surrounding this particular general election cycle. The GBP did slide but election jitters did not take the GBP under siege. Rather, the Bank of England (BoE) hold on monetary policy last week gave the GBP a bit of reprieve from the election selling. Without a statement from the BoE after its policy announcement, the market is left to trade on its own expectations for a series of interest rate increases out of Great Britain to begin in early 2016. However, in the past few weeks, BoE members have taken to jawboning to temper those hawkish expectations.

In addition to hawkish expectations and election jitters, trading this month is already fraught with seasonality themes….

Read the full report: Quid Report, Volume 7 (subscribers only).

April 9, 2015June 15, 2015

Can Kiwi Break Out?

The GBP/NZD rallied as expected last week. It moved higher past the Fibonacci levels to the high at 1.9996. However, the 2.00 level served as formidable resistance for last week’s rally. As warned last week (Volume 5), the pair immediately gave up 2 support levels below the 2.00 resistance when it moved back to 1.9824 after the high. It was at this point, even after the subsequent bounce out of that level to 1.9965, that sellers took back control of the GBP/NZD.

The pullback from the 2.00 resistance level has already breached the 61.8% Fibonacci level of last week’s rally. That is one signal that price will continue lower but it a tentative signal. The GBP/NZD is a volatile pair so an overshoot of levels is not a definitive indication of direction. However, momentum on the RSI is still squarely in bearish territory even after the rally to 1.9996. From this point of view, the GBP/NZD is biased to move lower to support at 1.9350.

The GBP/NZD remains range bound between 2.0800 and 1.9350. However, given the failure at the middle of the range it is likely that a return to the range bottom might push to new lows towards 1.9250. This level is the extreme range bottom, if you look at the entire range between 2.1055 and 1.9250. With the RSI on the weekly chart also firmly in the sellers territory, there it seems sellers are looking to push lower than the 1.9569 lows of last week.

This is an excerpt from this week’s issue of Quid Report. Subscribers receive my research on all major GBP pairs at the top of the week, including access to @faithmightfx on Twitter for daily, real-time calls and adjustments to the weekly report. AVAILABLE NOW.

January 31, 2015January 31, 2015

The Sterling Digest, 31 January 2015: central bank drama

Davos cartoon posted on Twitter — The World Economic Forum. The time of year when central bankers like to surprise.

It’s been an incredible month. Our first trading month of 2015 is in the books and it did not lack for surprises and drama. Crashing oil prices kicked off volatile trading as the new year began. The Swiss National Bank got things going with their surprise abandonment of their currency peg to the euro and interest rate cut into negative territory. The Bank of Canada surprised markets too with its interest rate cut much sooner than markets expected. The European Central Bank also managed to surprise with a larger than expected quantitative easing package. The Federal Reserve surprised markets too but in the other direction. While it did not make any changes to monetary policy, the $FED remains hawkish following Yellen’s hawkish signals in December. Finally, the Bank of England turned seemingly dovish with its hawks relinquishing their call for interest rate hikes. The incredible drama series that was January certainly sets the stage for a new normal to emerge in 2015.

The Swiss currency bombshell – cause and effect (Financial Times)
2015: The global economy’s ‘sink or swim’ moment (CNN Money)
Carney-Yellen Neck-and-Neck on Being First to Raise Rates (Bloomberg)
Fed Waits, RBNZ Shifts (AshrafLaidi.com)
The Forlorn British Pound: The ‘Schedule’ For Rate Hikes Pushes Out To 2016 (Seeking Alpha)
Don’t Lose the Forest for the Trees: Dollar Rally Still in Early Days (Traders Log)

Image credit

November 26, 2014

GBP/NZD Sets Up

The GBP/NZD opened the week very bullish as signaled by its close above 1.9750. The rally this week has already recovered all of last week’s losses. However, the GBP remains a sell as the rally this week has been capped at the 61.8% Fibonacci retracment level.