GBPNZD Technical Analysis | Market is bearish after a daily shooting star candle
BY Janne Muta
|November 8, 2023GBPNZD Technical Analysis- The GBPNZD pair remained weak as expectations for inflation in New Zealand declined only slightly to 2.76%, down from 2.83% in the preceding quarter. While the latest value is well below the January 2023 high of 3.62% the inflation expectations have remained near the current level since the Q1 this year.
In October the RBNZ signalled that with inflation remaining too high the OCR needs to stay at a restrictive level in order to return inflation to the 1 to 3% range (BRNZ goal) by H2 of 2024. The central bank saw a near-term risk that economic activity and inflation would not slow as much as expected.
Summary of This GBPNZD Technical Analysis Report:
- GBPNZD remained weak as expectations for inflation in New Zealand declined only slightly (2.76%, 2.83% previous).
- The last complete GBPNZD weekly candle is a bearish wide-range candle with a close below the previous week's close. Such an increase in downside momentum after a narrow-range candle the week before suggests the market is more likely to move lower than rally above last week's high.
- The daily GBPNZD chart shows how the market has broken a market structure level at 2.0735 and created a bearish shooting star candle in yesterday's trading. As a result, the market is bearish also in the daily timeframe.
Read the full GBPNZD Technical Analysis report below.
GBPNZD Technical Analysis
Weekly GBPNZD Technical Analysis
The last complete GBPNZD weekly candle is a bearish wide-range candle with a close below the previous week's close. Such an increase in downside momentum after a narrow-range candle the week before suggests the market is more likely to move lower than rally above last week's high.
Indicator-based GBPNZD analysis shows the market trading below the 20-period moving average and the stochastic oscillator giving a sell signal. This supports our price action-based GBPNZD technical analysis. The next major support level is the weekly pivotal low at 2.0275, while the nearest key resistance level is last week's high at 2.0977.
Potential Lower Swing High
A decisive break below the weekly pivotal low would mean that the high of 2.0977 is a lower swing high. This would indicate that a move to 1.9881 could be likely. Alternatively, a strong rally above the 2.0977 level would open the way to 2.1230.
Daily GBPNZD Technical Analysis
The daily GBPNZD chart shows how the market has broken a market structure level at 2.0735 and created a bearish shooting star candle in yesterday's trading.
Our GBPNZD technical analysis indicates, therefore indicates that the market is bearish also in the daily timeframe and could be targeting the lower end of the bearish trend channel at 2.0491. Alternatively, if GBPNZD can rally decisively above the daily swing high at 2.0818, we could see it moving to 2.1035.
GBPNZD Technical Analysis, 4h
The 4-hour chart shows the market trading near a support level at 2.0665. If the level is decisively broken, GBPNZD technical analysis indicates the market trading down to 2.0565, and then perhaps down to the channel low at 2.0491. However, if the market attracts buyers at this support level, we could see it retesting the bear channel top (currently at 2.0787).
Client sentiment analysis
TIOmarkets' clientele are bearish on GBPNZD, with 85% of clients holding short positions and only 15% bullish on the market.
Please remember that the retail trader client sentiment is a contrarian indicator as most of the retail traders are on average betting against the market trends. This is why, experienced traders tend to trade against the retail client sentiment. You can follow the TIOmarkets client sentiment live on our Forex dashboard.
The next key risk events impacting this market:
- UK GDP
- UK Claimant Count Change
- UK CPI
- RBNZ Statement of Intent
Potential GBPNZD Market Moves
The market is bearish in the daily timeframe and could be targeting the lower end of the bearish trend channel at 2.0491.
Alternatively, if GBPNZD can rally decisively above the daily swing high at 2.0818, we could see it moving to 2.1035.
How would you trade the GBPNZD today?
I hope this fundamental and technical GBPNZD analysis helps you to make better informed trading decisions. Check the latest market analysis for other instruments and subscribe to receive them in your inbox as soon as they are published
DISCLAIMER: TIO Markets offers an exclusively execution-only service. The views expressed are for information purposes only. None of the content provided constitutes any form of investment advice. The comments are made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.
Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.
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