Key Moments
- GBP/NZD appears to be stabilizing around the 2.25–2.27 zone in the coming days.
- Technical signals remain cautious: the nine-day moving average is still below the 21-day, keeping downside risks in play.
- A dovish RBNZ update and rising UK political risk are limiting sustained GBP/NZD upside for now.
Technical Outlook: Consolidation With Downside Bias
Model-based analysis indicates GBP/NZD is in a consolidation phase rather than showing a clear trend.
The nine-day moving average must rise above the 21-day to signal a near-term bullish outlook. That crossover has not happened yet. As the pair shows early signs of stabilization, the broader risk still leans toward downside.
In the short term, range-bound trading is likely, with the 2.25–2.27 zone expected to act as the main consolidation area.
| Indicator / Level | Current Assessment |
|---|---|
| Nine-day vs 21-day moving average | No bullish crossover yet; downside risk remains |
| Near-term trading zone | 2.25–2.27 seen as key consolidation range |
| Directional bias | Stabilization phase; overall risk still to the downside |
RBNZ Decision Limits NZD Momentum
The New Zealand dollar weakened last week after the RBNZ adopted a cautious tone and left interest rates unchanged.
The RBNZ also kept its Official Cash Rate (OCR) projections largely unchanged for the coming months. This contrasted with market expectations that priced in possible rate increases in the second half of the year.
The NZD’s earlier strength partly mirrored the Australian dollar, which benefited from the RBA’s rate hike. Traders had extended that narrative to New Zealand, but the RBNZ’s cautious stance disappointed the market.
“The market expected a more hawkish adjustment, but the RBNZ stayed cautious. The probability of a single rate hike this year now stands around 50%,” said Saxo Bank.
GBP/NZD: Stabilization With Caution
With NZD softening, GBP/NZD has shown early signs of stabilizing. If pound weakness eases, the pair could move higher in a visible way.
However, aggressive bullish positions remain premature. For now, risk-reward favors strategies that protect against renewed downside in GBP/NZD.
UK Political Risk May Cap Sterling Gains
UK political developments could limit sterling strength. Political risk is expected to remain high this week, with Prime Minister Keir Starmer’s Labour Party likely to lose to the Greens in Thursday’s by-election in Gorton and Denton.
Although internal challengers are unlikely to act immediately, the by-election underscores that a political risk premium will persist in sterling exchange rates this year.
Given this backdrop, any GBP/NZD recovery is expected to remain modest.
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