GBP/NZD just broke above a consolidation pattern!
Can the pair make new 2023 highs this week?
Or is the pair about to see some serious pullback?
Before moving on, ICYMI, yesterday’s watchlist checked out EUR/NZD for a potential reversal after the RBNZ’s rate hike. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
BOE Gov. Bailey expressed concern over “sticky” inflation amidst tight labour market
EIA: U.S. crude inventories fell by 12.5 million barrels vs. estimates of an 800K-barrel increase in the week to May 19
FOMC meeting minutes showed that members are “uncertain” about how much tightening may be needed
Germany’s Q1 2023 GDP was revised from 0.0% to -0.3%, putting the economy in a technical recession after Q4’s 0.5% decline
Strong wage expectations push Germany’s consumer confidence from -25.8 to -24.2, marking the strongest level since April 2022 and eighth consecutive increase.
Price Action News
Overlay of NZD Pairs 15-min
There were not a lot of fresh catalysts during the Asian session, which means that more traders had time to price in yesterday’s events.
That also meant more losses for NZD after the Reserve Bank of New Zealand (RBNZ)’s dovish rate hike yesterday.
Meanwhile, more risk-takers jumped ship as a lack of a U.S. debt ceiling deal and Fitch putting U.S. credit on “negative” watch got them jittery.
The U.S. dollar still gained pips against its major counterparts, but NZD saw heavier losses across the board.
U.K.’s CBI realized sales at 10:00 am GMT
U.S. preliminary GDP at 12:30 pm GMT
U.S. preliminary GDP price index at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. pending home sales at 2:00 pm GMT
Tokyo’s core CPI (y/y) at 11:30 pm GMT
Australia’s retail sales at 1:30 am GMT (May 26)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
GBP/NZD 14-minute Forex Chart Chart by TV
In case you missed it, the combo of RBNZ’s “dovish hike” and a higher-than-expected U.K. core CPI got traders buying GBP and selling NZD yesterday.
The same themes carried over to today and now GBP/NZD has broken above a pennant-type consolidation on the 15-minute time frame.
Can GBP/NZD extend its gains?
Take note that the pair is almost at the R1 (2.0400) of today’s Standard Pivot Points, which lines up with April’s highs near the level.
The pair has also already risen by about 50 pips more than half of its 158-pip daily volatility.
A rejection at 2.0400 opens GBP/NZD to a move back to its 2.0300 previous resistance levels.
But if traders don’t let up on buying GBP and/or selling NZD, then GBP/NZD could make new 2023 highs and make a play for February 2022’s highs near 2.0500.
