• GBP/NZD strengthened on Tuesday as traders positioned ahead of RBNZ rate decision.
• Investors anticipate another RBNZ rate cut on Wednesday, though the scale remains uncertain as the economy struggles with weak growth and hiring despite 250 bps of prior easing.
• The RBNZ lowered the Official Cash Rate by 25 basis points to 3.00% in August, noting that additional easing could be necessary as Q2 growth slowed..
• New Zealand’s Q2 GDP fell 0.9% q/q, a sharper contraction than forecast. Meanwhile, unemployment at 5.2%, soft consumer confidence, and weak retail sales continue to weigh on growth
• Technicals leans bullish as RSI is at 60 bullish, and 9,11 and 14 DMA’s are trending up.
• Immediate resistance is located at 2.3177 (Daily high), any close above will push the pair towards 2.3261 (23.6%fib).
• Strong support is seen at 2.3068 (38.2% fib) and break below could take the pair towards 2.2988 (SMA 20).
Recommendation: Good to buy around 2.3100, with stop loss of 2.3000 and target price of 2.3200
