GBP/NZD set to test 2.00 this week - Barclays
|The Barclays Research Team is out with its trade recommendation at the start of this week, advising going long GBP/NZD.
Key Quotes:
“Apart from the benefits of a low sensitivity in the cross to risk sentiment, we highlight the positive seasonality for the GBP in April
The GBP has not had a down month in April in the past 10 years with an average gain of 2.2% against the USD.
UK political uncertainty is continuing to fade, with our latest Brexit Investor Survey suggesting that investor sentiment has improved significantly following the developments leading up to the March EU Summit
While our expectations for UK inflation, retail sales and wages this week are broadly in line with consensus, momentum is positive for GBP and we think further gains are likely.
UK-EU informal negotiations may generate some noise for GBP markets and present risk to the trade, however.
In New Zealand, we see the possibility of a weak inflation print this week, given soft pricing intentions and business confidence in the latest Quarterly Survey of Business Opinion.”
“Trade Strategy: Go long at 1.9354 for the target of 2.00, with a stop-loss placed at 1.9050.”
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