Weekly Technical Outlook: GBP/NZD ;Market Forecasts for August 24th – August 28th

• Stop loss    2.4055
• Entry level   2.3591
• First target at 2.3137
• Next targets to test at 2.2806, 2.2651

Technical Analysis

A deeper decline for GBP/NZD is expected strongly as long as 2.400 resistance continues to hold. At this point, such decline is viewed as a correction to the market for GBP/NZD pair. Thus, we’d expect strong resistance around long term at 2.400 to contain downside. Meanwhile above 2.4055 will turn bias back to the upside.

In the bigger picture, current development suggests that a medium term downside is already taken place and a deeper correction could be seen possibly at 2.3137 levels. There is a clear indication of trend reversal with back to back two bar rejection which closed below the resistance and with a break of trend line suggesting a shift in the momentum.

Focus will be on the structure on the current fall from current levels. We’d expect a strong resistance at current levels while a break of 2.591 has confirmed a bearish move on the pair; we shall look for a retest of the level. The fall from these levels should test 2.3137 and would extend to 2.2806 and later to 2.2651 minor support areas. Meanwhile, above 2.4055 should extend the upward bias which shall dampen our short term view. Outlook remains bearish for week.

Economic

• Nationwide Housing Price for the UK
• GFK Consumer Confidence
• Gross Domestic Product with Total Business Investment
• RBNZ Inflation Expectations, Trade Balance with Imports and Exports

Area of Interest

• Strong resistance at 2.400 areas decline from current levels.
• Bearish pattern confirmed with back to back two bar reversal at resistance levels.
• Pair broke the trend line and closed below the trend line retesting the area.
• Key area to target to the downside bias shall be at 2.3054 Levels.

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