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Trading ideas for GBP/USD, NZD/USD, Gold

April 26, 2022

GBP/USD: Cable fell to fresh lows below the 1.2700 level amid a negative market mood and news that the Fed would hike rates aggressively this year. US dollar remains the key driver, while risk-sensitive currencies like the GBP and CAD decline. Last week, cable showed a bearish dynamic on weaker than expected UK economic data. Moreover, last week’s comments from the Bank of England hinted at a 50 basis points rate hike in May. Some analysts said that the Bank of England would announce three more 25 basis points rate hikes in the coming months due to inflationary pressures.

BUY LIMIT 1.2670/TP 1.2900/SL 1.2600

 

NZD/USD: Kiwi reached a strong support level at 0.6580, its lowest in the last three months. It then rebounded, but the pair remains under pressure on the back of a stronger US dollar across the board. NZD is falling against the dollar for the third day in a row, accumulating a decline of more than 200 pips. The key driver of the negative dynamic is the risk-off sentiment. The deteriorating coronavirus situation in China and concerns about the impact of the Federal Reserve’s aggressive policy tightening exert pressure on commodity-linked currencies, including the New Zealand dollar.

SELL 0.6615/TP 0.6515/SL 0.6650

 

Gold: Gold was pressured yesterday by a downtrend after breaking the previous narrow consolidation zone. The pessimism in the gold prices is marked by growing inflation in the US economy. The US Consumer Price Index has reached multi-decade highs along with the second driver, the tight labor market that has already featured a 50 basis points interest rate hike by the Federal Reserve. Going forward, the precious metal is likely to be affected by the US Consumer Confidence and Durable Goods Orders data, which are due to be released today.

BUY 1900.00/TP 1910.00/SL 1897.00