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Medium-Term Bullish Outlook as Head and Shoulders Bottom Formed
Central Bank
Forex
Summary:
The Deputy Governor of the Bank of England (BoE) recently issued hawkish signals, suggesting that the central bank may maintain aggressive monetary policies, including keeping interest rates high in the short term. The British pound could strengthen as a result, while the New Zealand dollar may continue to weaken due to the Reserve Bank of New Zealand's (RBNZ) ongoing dovish stance on interest rate cuts.
Buy
CLOSEDGBPNZD
End Time
2.15369
Entry Price
2.19500
TP
2.13500
SL
2.20268 +0.00087 +0.04%
4131
Points
Profit
2.13500
SL
2.19500
CLOSING
2.15369
Entry Price
2.19500
TP
Fundamentals
United Kingdom:
Last Friday, the Bank of England (BoE) released mortgage data showing that the number of approved new housing loans reached 56,000, reflecting a rebound compared to previous months. This recovery in October suggests that the market is gradually adapting to the current economic conditions, with signs of economic growth resuming.
Additionally, the BoE Deputy Governor recently signaled a hawkish stance, implying that the central bank may continue to implement aggressive monetary policies and maintain high interest rates in the short term to address inflationary pressures. Market expectations for BoE rate cuts are diminishing, which could provide support for the pound.
New Zealand:
On November 27, the RBNZ cut interest rates by another 50 basis points to 4.25%. However, inflationary pressures persist, and the economic growth outlook remains uncertain. The RBNZ Governor also stated that larger-scale easing measures may be taken in the future. This dovish stance is likely to exert downward pressure on the New Zealand dollar in the medium term.
Technical Analysis
Looking at the weekly chart, the highs and lows of GBPNZD are steadily rising, with the candlestick movement consistently following an ascending trendline. This indicates a clear medium-term uptrend with strong continuity.
In the 4-hour chart, GBPNZD has formed a head-and-shoulders bottom pattern to signal the potential continuation of its upward trend.
If the head-and-shoulders pattern holds, the initial target for GBPNZD would be to test the 2.1908 high. Should the pair continue to climb and break above the weekly high, it could potentially rise to around 2.4410.
In terms of trading strategy, it is recommended to buy the dips.
Trading Recommendations
Trading Direction: Buy
Entry Price: 2.1500
Target Price: 2.1950
Stop Loss: 2.1350
Valid Until: Dec 16, 2024 15:00:00
Support: 2.1479, 2.1407, 2.1361
Resistance: 2.1552, 2.1607, 2.1842
Risk Warnings and Investment Disclaimers
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