Pound Enters New Uptrend Against New Zealand Dollar after Piercing Major Trendline
The Pound has been rising strongly against the New Zealand Dollar as it maintains its uptrend.
It closely evaded a potential breakdown from its ascending channel as we forecast in our weekaheads and instead continued rising.
On Tuesday is soared following the news that Theresa May was going to try to hold a snap election in June, to solidify her mandate for Brexit negotiations.
The pair clearly pierced through a trendline drawn down from the June highs and this was a very bullish sign.
It probably means the trend has changed and the exchange rate is likely to move higher, potentially towards an eventual target at 1.9000.
The target is calculated by taking the length of the rally prior to the break (a) and extrapolating it higher after the break (b).
For confirmation of an extension of the uptrend we would ultimately be seeking a break above the 1.8346 highs.
Although analysts such as Jason Wong of BNZ have argued the New Zealand Dollar is undervalued, there is an even bigger consensus who see Sterling as even more undervalued.
