The British pound seems like going higher in the medium term, and is under correction in the short term against the New Zealand dollar. The GBPNZD pair traded lower yesterday towards the lower band of the Bollinger bands on the daily timeframe. However, the bullish bias is still intact in the pair, and it is likely to continue trading higher in the coming days. So, I think we should be looking for buy opportunities in the medium term.
There is a major support area around the 1.9950-1.9800 levels for the GBPNZD pair which also coincides with the 200 moving average. It might act as a strong support moving ahead. So, if the corrects a lower from the current levels towards the mentioned area, makes a stop and forms a bullish divergence, then we can enter into a buy trade.
Initial target should be around the 2.0150 level, and final target could be around the 2.0250 levels. Stop should be placed below the 200 moving average.
Reviewing recent events and trades
The US dollar was hammered yesterday after a flurry of poor economic data in the US. The US retail sales, producer price index and NY empire state manufacturing index all registered a healthy decline compared with the expectations. The pairs such as EURUSD, GBPUSD, NZUDUSD and AUDUSD jumped sharply and traded to new weekly highs. The EURUSD pair traded close to 1.2880 level before reversing again. The pair has managed to settle above the 1.2750 level, which is a bullish sign.
Fundamental Outlook for the day
Today, there are several important releases lined up again during the NY session, including the US initial jobless claims, industrial production data and Bloomberg consumer confidence. So, we might again see some action in the US dollar. One of the FOMC members Bullard will also be speaking later today. Let us see how the US dollar trades during the upcoming sessions. It would be interesting to see whether it can regain some ground in the short term or continue trading lower.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, GBPCHF, AUDCAD, USDCAD, USDJPY, CADJPY, AUDJPY and NZDUSD.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
