Finally, the cross printed a solid weekly gain of 2.20% for the 1st time since early January 2021. And we have spotted three positive factors for this cross.
All the above three factors are suggesting that we have reached the near-term bottom. GBP sold for most of the last week against the EUR. If you are a GBP bull, then long GBPNZD is the counter you should focus on. Golden crossover pattern could support the GBPNZD in the near term to 2.00 levels.
Our forecasting model on “History repeats itself” suggesting that crosses such as EURGBP should be bought in dips.
Macros: Data points-wise pound was not served with high energetic, positive data points last week. But the latest services PMI figure revealed that March PMI sharply up from 49.5 to 56.3 in March. Finally, UK’s service PMI figure posted above 50 figures for the 1st time since October 2020, as per IHS Markit.
Looking ahead, the GDP latest figure for the UK and Industrial Production for EZ and UK are the data points we focus on.
“In the UK, GDP numbers are expected to show the economy struggling during the lockdown, albeit with the PMI surveys hinting at new signs of life as the successful vaccine roll-out lifts domestic demand. Trade data will be closely watched, however, for clues as to the impact of Brexit on EU trade.” IHS Markit reported.
The pound traded higher against its G10 counterparts on Monday ahead of monthly UK’s gross domestic product.
Ahead of the monthly GDP data, 0.8700-0.8730 is the resistance zone you should focus on. A decisive breakout above 0.8730 could propel forward to 0.8770. Flipside support exists at 0.8620-0.8600 and 0.8530. Post 2.30% straight rally last week, some resistance to being expected around 0.8700 levels.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
What is your Technical View?
Do you have a different idea? Please leave us a comment and get an answer from our professional analysts