GBPNZD has run into a wall of resistance after shooting higher on the back of encouraging jobs data out of the UK and disappointing NZ inflation figures. The employment rate in the UK fell to 6.9% in Q1, beating an expected fall to 7.1% from 7.2%. Furthermore, 239K jobs were added over the month, smashing an expected 90K increase in employment. The news sent investors flocking to the pound, with GDPUSD hitting its 2014 high.
NZ’s CPI fails to impress
In NZ, Consumer prices rose 0.3% q/q, less than an expected 0.5% increase (prior 0.1%), which casts some doubt over the market’s assumptions about the Reserve Bank of New Zealand’s (RBNZ) tightening cycle. The market is pricing in some fairly aggressive monetary policy tightening from the RBNZ in the next couple of years, underpinned by predicted strong growth and inflation. Hence, the disappointing inflation data weighed on the kiwi yesterday.
Things may be looking up for GBPNZD
Overall, the weakness in the kiwi yesterday and the strength in the pound overnight helped to push GBPNZD to a resistance zone around a convergence of its 200-day and 50-day SMAs. The pair remains in a board upward trend, thus our bias remains higher. Also, MACD suggests that momentum remains to the upside. The underlying technical and fundamental strengths of the pair may see it make a run for its 100-day SMA if it can break through the aforementioned resistance zone around its 200-day SMA.
Source: FOREX.com
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