The quotations of the pound in relation to the New Zealand Dollar (GBP/NZD) have been climbing upwards since around mid-December. However, taking into account the huge falls of October and November, this move still has a very limited range and still has signs of correction.
The beginning of the year brought a strong shock to the currency markets and since then the rise has slowed down. The situation in the perspective of the weekly chart looks interesting. It shows that the exchange rate oscillates in the area of an important and respected for a long time resistance around a round level of 1.90. This level may stop the growth, all the more so as fundamental issues may soon speak in favour of it. What affects the quotations of currencies such as the New Zealand Dollar is the issue of trade tensions between the USA and China. It is worth bearing in mind that negotiations are about to start soon, and the weaker recent readings from the Chinese economy may encourage the Chinese to make concessions, which will increase the chances of an agreement. On the other hand, the issue of Brexit will return in days. The debate is approaching and it is possible that the next vote in the British Parliament on the Brexit agreement will take place. This period may, therefore, increase the state of uncertainty, which will translate into a return of the weakness of the pound. A potential scenario is, therefore, a return to the GBP/NZD falls in the coming weeks.
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