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GBPNZD & EURJPY Outlook
Published: 10/18/2018

A man moving the king chess piece on a chess board knocking over all the black chess pieces of his opponent in a power play

The GBPNZD has fallen under the 2.0000 level again today, after spending this week testing the level and its associated zone of control. The Pound is under pressure from UK data with Retail Sales falling to -0.8% from 0.3% last month. The expected reading was -0.4% today. Milder weather is affecting the sale of winter clothing and the hot summer accounted for an increase in food sales. New Zealand data released tonight and tomorrow as Visitor Arrivals and Credit Card Spending respectively. Resistance can be seen at this week’s high around 2.0037. A break higher above this level may seek to close the gap, around 2.0201, from last week. The high for the year was hit at 2.0482 early last week.

Support for the pair can be seen at the 50 DMA at 1.9800. A loss of this moving average may see support form around the late April highs, at 1.9762. The most recent higher low was 1.9645 that has previously been used as support and resistance. The 100 DMA is rising towards the 1.9600 area with the 200 DMA just below the 1.9457 level of previous resistance. A loss of these levels might point to a deeper retracement and a retest of the rising trend line support at 1.9200 or the 1.9153 level of support below it. The major area of support since February has been the 1.8955 to 1.8900 band.

 

The EURJPY pair is range bound between 133.500 and 124.650 since the February selloff. The DMA’s are positioned around 130.000. Risk off sentiment affected the pair, but there is little sign of any real attempt to break the range. A break back above 130.000 would be step 1 followed by a move above 130.517. From there, 132.000 may present as resistance. The 133.000 area and the highs at 133.155 and 133.500 for a band of resistance and the range top. Above this area price could attempt to reach for the high at 137.500.

Support below 130.000 may come together at 129.138. The moving averages are clustered around 130.000 but a retest of any one of them as resistance following a break lower may signal a move to test downside supports, as happened with the 50 DMA in May. Below this area, the 128.000 has been used as support in September and a loss of this point could see a test on 127.000. The floor for the range starts at 125.000 and extends down towards 124.650.

 

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