WELLINGTON: GBP/NZD pulled back temporarily after rising to the highs of its consolidation range after NZ GDP data showed the New Zealand economy grew by a greater-than-expected 1.1% in Q3. The correction was only temporary, however, as UK GDP data has also been strong, with Q3 showing an upward revision from 0.5% to 0.6%. From a technical perspective, the short-term trend higher remains intact. A break above the top of the range, above 1.8003, would confirm a move up to the next resistance level at 1.8100.
A break above the top of the range and 1.8003, would confirm a move up to the next resistance level at 1.8100. A further break above 1.8150 would then signal a continuation to 1.8300 – a target calculated by extrapolating the range by a Fibonacci ratio of 61.8% higher. The New Zealand Dollar has a mixed outlook. On the positive side, it boasts a relatively strong growth trajectory of 3.3% per annum and high-interest rates at 1.75%. On the downside, however, are fears about a slowdown in its major trading neighbours China and Australia and the impact of protectionism from Donald Trump’s anti-trade policies.
