Source: PaxForex Premium Analytics Portal, Fundamental Insight

The New Zealand Trade Balance for July came in at NZ$1,092M monthly and at -NZ$11,640M annualized. Forex traders can compare this to the New Zealand Trade Balance for June, reported at -NZ$1,102M monthly and -NZ$10,940M annualized. Exports for July came in at NZ$6.68B and Imports at NZ$7.77B. Forex traders can compare this to Exports for June, reported at NZ$6.27B, and Imports, reported at NZ$7.38B.

UK Retail Sales for July are predicted to decrease 0.2% monthly and 3.3% annualized. Forex traders can compare this to UK Retail Sales for June, which dropped 0.1% monthly and 5.8% annualized. UK Core Retail Sales for July are predicted to contract 0.2% monthly and 3.1% annualized. Forex traders can compare this to UK Core Retail Sales for June, which increased 0.4% monthly and decreased 5.9% annualized.

Financial markets attempt to close today in the green to mark the fifth bullish week in this bear market rally but have struggled over the past two trading sessions to piece together meaningful momentum. Economic reports continue painting a mixed picture, and global central banks continue to hike interest rates. While inflation eased in July, markets have not prepared for prolonged inflation, and the US Federal Reserve noted it would increase borrowing costs until inflation comes down to a sustainable 2%. The British Pound struggled after the Bank of England hinted at a five-quarter recession beginning in the fourth quarter of 2022 but regained lost ground as the British central bank is the only one with a realistic outlook, while its global counterparts lost all credibility.

The forecast for the GBP/NZD remains cautiously bullish after this currency pair bounced off its horizontal support area while it attempts to maintain its upward trajectory. Volatility should remain elevated as bulls and bears wrestle for control, as confirmed by the flat Kijun-sen and the descending Tenkan-sen. The Ichimoku Kinko Hyo Cloud has narrowed and remains in a sideways trend, suggesting preparations for a substantial move. Traders should monitor the CCI after it has completed a breakout from extreme oversold territory but continues to trade below zero. A breakout above zero could trigger the next part of the rally, and traders should wait for it before buying into increasing bullish momentum. Can bulls regain control over the GBP/NZD and push price action into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.

Should price action for the GBP/NZD remain inside the or breakout above the 1.9000 to 1.9130 zone the following trade set-up is recommended:

• Timeframe: D1           
• Recommendation: Long Position
• Entry Level: Long Position @ 1.9080
• Take Profit Zone: 1.9535– 1.9630
• Stop Loss Level: 1.8900

Should price action for the GBP/NZD breakdown below 1.9000 the following trade set-up is recommended:

• Timeframe: D1           
• Recommendation: Short Position
• Entry Level: Short Position @ 1.8900
• Take Profit Zone: 1.8630 – 1.8730
• Stop Loss Level: 1.9000

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