Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

76.5% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

GBP or NZD: which currency has potential?

GBP or NZD: which currency has potential?

Information is not investment advice

These days it seems that all the financial news are orbited around the US dollar, it has a lock on everyone’s attention. However, there are some interesting cross-currency movements that you can gain from. Let’s have a look at GBP/NZD pair. It has shown the steep surge this week after its dramatic fall during March.

What’s happening with the British pound?

The pound recovered partly because of the Fed’s measures to provide more dollars to the global financial system. The demand for the USD has eased, and that has slowed the capital outflow from the UK. Moreover, the issue of Brexit is once again being cited as a factor driving Sterling. Most analysts believe that the British pound might get a boost if the United Kingdom and the European Union agree to extend Britain's post-Brexit transition.

On the other hand, we can’t say that the outlook for the GBP has become completely positive. Firstly, the UK's current coronavirus death toll indicates the country is on a worse trajectory than China, according to economists Pantheon Macroeconomics. The country recorded two worst-ever death tolls in a row on Tuesday and Wednesday, with 944 deaths from the virus in 48 hours. Secondly, although the Federal Reserve is doing its best to provide more dollars to those who seek the USD cash, the escalation of stress due to the further spreading of the disease may negate these efforts. If it happens, the market will rush back to the greenback and the GBP will be one of the currencies everyone will be selling.

What’s happening with the New Zealand dollar?

Sharp increases of confirmed coronavirus cases throughout the world have made the New Zealand dollar, the so-called ‘risky currency’, unfavorable. Moreover, its commodity heavy economy is also suffering amid a nationwide 'lockdown' and dependence on a robust world economy. Unlike with the GBP, we don’t have positive things to add to this equation.

Technical analysis

On the GBP/NZD chart below, we can notice three spikes during March, identified by the rectangles. Then there had been an upward trend since 23 March until it reached the 2.101 mark touching 50% Fibonacci retracement level. However, yesterday the chart reversed and plummeted. It may continue moving down toward the 2.065 mark lying on the support line. Also, if we have a look at the awesome oscillator below the GBP/NZD chart, we can assume that the chart will decline.

GBPNZD H4.png

Conclusion

If you want the diversification from the USD, it’s worth considering trading crosses. Among them, GBP/NZD is a good choice. We have examined fundamentals for both currencies and saw that the GBP is more resilient than the NZD. As a result, watch the marked support levels for reversal patterns and other bullish signals. Remember that the situation may change quickly and lead to big price swings, so be ready to react and open trades.

Similar

How to Stay Calm and Trade on Uncertainties

Despite the negative news and worrying headlines, we recommend traders to make mental reframing of the situation. This way, you can look at the market from a different perspective. Let’s observe how you can take advantage of the uncertainties and make the fundamentals work for you!

Popular

Gold isn't saving investors from inflation

Many investors treated gold as a protection against inflation. However, last week, gold lost its major support and dropped despite rising inflation. Why did it act like this?

Choose your payment system

Feel the Team Spirit

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later