Following the sharp depreciation of the pound in the last 3 months, it is now to make a point about what might happen. Indeed, the pair GBP / USD made a major break with fracture of 1.5270, a level that had supported the course since August 2012 and the analysts aren’t optimistic about the future recovery of the cable. This article will focus specifically to analyze not only the GBP / USD but other pairs, such as GBP / AUD and GBP / NZD, which may have advantages particularly interesting because of the positive rollovers.
First all, let’s turn to the news and statistics of economic calendar this week may seem to strongly influence the course of these pairs. The little English statistics this week will highlight the full statistics in Australia and New Zealand.
The largest publications expected this week in Australia are the statistics on the labor market. The Australian unemployment rate is expected to rise to 5.5% in February against the precedent to 5.4% in January, and the change in employment expected to decrease to 10.0K during the same period as against 10.4 K in January. If these two publications confirm the deterioration of the labor market in February, the AUD could be under pressure unless the factor risk appetite takes precedence over the markets later.
Graeme Wheeler and his cronies make their decision on the refinancing rate of the Central Bank of New Zealand expected unchanged at 2.50%, a factor calling for neutrality or appreciation of the local currency.
GBP / AUD-Last week the pair has recorded new lows after getting out of a long term triangle in February. With new lows already registered earlier this week, it becomes increasingly likely that a new long-term bearish phase takes shape as the triangle suggests. Thus, the week could be decisive for the pair GBP / AUD which will be sure to keep the 1.4550 support to avoid a real downward acceleration. Note that the theoretical aim of the triangle can be determined by comparing the size of the configuration at the break, which gives us a target to 1.30. If the numbers of jobs in Australia allow an acceleration of the decline Wednesday, it would be interesting to think about strategies breakage. In the case where the pair made a bounce and manages to maintain the support 1.4550, this would delay the bearish and let consider a return to 1.48/49 to sell better.
GBP / NZD – Considering the relative strength of the New Zealand dollar, with GBP / NZD is already creating new lows for six weeks. With expected rates unchanged in New Zealand, the pair could continue its free fall in place since the beginning of the year. As the GBP / AUD, GBP / NZD are out of a triangle configuration whose goal is suggested to 1.50. Even in the case of a rebound following rates, the market remains bearish under 1.90. Intermediate resistance to 1.8550 could also allow entries vendors in the case of a rebound. We therefore prefer lower on this pair with a possibility of either selling a rebound towards 1.8550 or even 1.90 in extension or to enter on a new downward acceleration.