Is GBP/NZD giving bullish traders another chance to catch the uptrend or is a reversal already in the works?
We’re seeing a neat technical setup on the daily time frame, with price bouncing right at the sweet spot where multiple technical indicators converge.
Check out the pair’s chart!
GBP/NZD Daily Forex Chart by TradingView
Bank of England’s “hawkish cut” surprise last week showed a 7-2 vote split when cutting rates to 4.25%. This tells us that most central bank members remain concerned about inflation persistence, which turned out GBP-positive compared to many other central banks.
Meanwhile, the New Zealand dollar is facing serious headwinds from global trade uncertainty. The RBNZ even warned in their Financial Stability Report that U.S. tariffs would lead to “higher financial market volatility” and economic slowdown. With New Zealand’s economy heavily dependent on exports, these tariff threats hit NZD harder than GBP.
The UK-US trade deal announcement last week was another fundamental boost for Sterling, providing Britain with preferential treatment compared to other nations facing Trump’s tariff regime.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and New Zealand dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/NZD had been trading in an uptrend since mid-2024, but recently saw a retracement after hitting highs near 2.3000 in April. Now the pair is showing signs of renewed strength exactly where eagle-eyed traders would be looking for a buying opportunity.
The correction has found support right at the 61.8% Fibonacci retracement level around 2.2200-2.2400, which aligns with a rising trend line that’s been guiding the uptrend since mid-2024.
Add to that, the 100 SMA support is right there too, providing an extra layer of technical reinforcement. This confluence of support (Fib, trend line, and moving average) often creates the perfect storm for a bullish reversal.
Bullish candlesticks and sustained trading above the 2.2400 area could propel the pair toward the previous 2.3000 highs, if not fresh 2025 peaks.
On the other hand, if GBP/NZD starts printing enough red candlesticks to consistently trade below the trend line and 100 SMA support that we’re watching, then keep your eyes peeled for a potential trend reversal that might drag the pair down to support levels around 2.2000 or even 2.1850.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!