The GBPUSD pair has fallen sharply for five days, reaching its lowest point since November 2023, around 1.2120. The British Pound has been struggling due to concerns about “stagflation,” which combines high inflation with weak economic growth. Adding to the pressure, rising UK government bond yields after the Labour government’s budget plan in October have raised fears that borrowing targets may not be met. Meanwhile, a strong US Dollar, backed by expectations that the Federal Reserve will pause rate cuts soon, is further weighing on the Pound.
The US Dollar remains strong after better-than-expected job numbers for December, which showed 256K jobs added and a slight drop in the unemployment rate to 4.1%. Ongoing global risks, like the Russia-Ukraine conflict and Middle East tensions, are boosting demand for safer assets like the Dollar. Even though the Pound has recovered slightly from its daily low, the overall market outlook suggests it could face more downward pressure. Investors remain cautious, and any bounce-back for GBPUSD might not last long.
GBPNZD – D1 Timeframe
Following the bullish break of structure on the daily timeframe chart of GBPNZD, we see a steady downward glide as the price aims for the demand zone at the origin of the bullish break. Interestingly, the 100-day moving average and a trendline support the drop-base-rally demand at the base of the impulse.
GBPNZD – H4 Timeframe
On the 4-hour timeframe of GBPNZD, we can see that price had a sweep of liquidity just before the onset of the bullish momentum. In this light, and with the other confluences observed on the daily timeframe, it is safe to conclude in favor of a bullish outcome.
Analyst’s Expectations:
- Direction: Bullish
- Target: 2.21677
- Invalidation: 2.13569
