GBP/NZD is recovering from a recent 1.8713 low and appears to be pushing higher on a near-term bullish falling wedge pattern. The cross faces the risk event of a Reserve Bank of New Zealand (RBNZ) policy meeting on 13 April where a dovish outcome would underpin further advances, Benjamin Wong, Strategist at DBS Bank, reports.

Expectations of a dovish RBNZ

“The lack of data since the February 25 bps rate hike has us veer towards an ideal 25 bps rate hike, with the RBNZ likely to hold back on its gunpowder before the 25 May monetary policy statement which would provide a timely update. This dovish outcome is supportive for a higher advance on the GBP/NZD cross.”

“The weekly Ichimoku chart reveals the cross has ventured into an oversold reading. However, there are limitations too given the weekly MACD signal remains bearish. The cross’ first resistance of sorts rests into the Ichimoku cloud fringe at 1.9299. Sustaining gains over that would start to build the case for the upside for the mid-March highs contouring 1.9368.”

“Shifting to a short-term time frame, one can see that the cross is enjoying the support of a bullish falling wedge reversal.”

See – RBNZ Preview: Forecasts from six major banks, surprising with a double shot hike?