Currency - GBP / New Zealand Dollar

The chart above is a pretty clear signal that a triangulation pattern is dominating the Sterling - New Zealand Dollar exchange rate. The dilemma that traders face is a clear one; like the Australian Dollar, the Kiwi Dollar is seen as an attractive high yielding destination for investment funds. But, Sterling is also recovering slightly as the oversold status it held at the start of the year is unwound. New Zealand’s; economy is no better off than anywhere else and perhaps slightly less well placed than some others but it is the 2.5% base interest rate that sets it apart at a time when getting interest on deposited funds in the US, UK, Japan, Switzerland or the EU is pretty much a lost cause. As you can surmise from the chart, sooner or later we have to see either the top or the bottom of this pattern break and I think a break to the downside is the most likely scenario in the near term.