Source: PaxForex Premium Analytics Portal, Fundamental Insight
The New Zealand Business PMI for October came in at 49.3. Forex traders can compare this to the New Zealand Business PMI for September, reported at 51.7.
New Zealand Food Prices for October increased by 0.8% monthly. Forex traders can compare this to New Zealand Food Prices for September, which rose 0.4% monthly.
UK Construction Output Seasonally Adjusted for September is predicted to decrease by 0.6% monthly and rise by 34.5% annualized. Forex traders can compare this to UK Construction Output Seasonally Adjusted for October, which rose 0.4% monthly and 6.0% annualized.
The UK Preliminary GDP for September is predicted to decrease by 0.4% monthly. Forex traders can compare this to the UK GDP for August, which contracted 0.3% monthly. The UK Preliminary GDP for the third quarter is predicted to drop 0.5% quarterly and rise 2.1% annualized. Forex traders can compare this to the second quarter GDP, which rose 0.2% quarterly and 4.4% annualized.
UK Industrial Production for September is predicted to drop 0.2% monthly and 4.3% annualized. Forex traders can compare this to UK Industrial Production for August, which contracted 1.8% monthly and 5.2% annualized. UK Manufacturing Production for September is predicted to drop 0.4% monthly and 6.6% annualized. Forex traders can compare this to UK Manufacturing Production for August, which plunged 1.6% monthly and 6.7% annualized.
The UK Visible Trade Balance for September is predicted at -£18.750B. Forex traders can compare this to the UK Visible Trade Balance for August, reported at -£19.260B.
US CPI data released yesterday, which came in softer than feared, sparked the biggest equity rally since 2020 as traders hope that peak inflation is behind us. The more pressing issue is the threat of stagflation, a scenario where growth remains subdued while inflation and interest rates are high. The US Fed signaled it would keep raising rates and maintain them until inflation drops to its 2.00% target, which may take years. Any euphoria over a decrease in inflation should not dictate trading behavior, as the long-term economic outlook is bearish.
The forecast for the GBP/NZD remains bullish after this currency pair has approached its ascending Ichimoku Kinko Hyo Cloud, which could act as a springboard for more upside potential. Volatility is expected to rise, with the flat Kijun-sen suggesting the absence of short-term bullishness while the Tenkan-sen contracts. Traders should monitor the CCI after it has completed a breakout from extreme oversold territory with plenty of upside potential. A move above zero could spark the next leg higher. Can bulls build on their recent gains and guide the GBP/NZD 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 1.9360 to 1.9515 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.9445
- Take Profit Zone: 1.9910– 2.0050
- Stop Loss Level: 1.9230
Should price action for the GBP/NZD breakdown below 1.9360 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.9230
- Take Profit Zone: 1.8925 – 1.9050
- Stop Loss Level: 1.9360
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