![GBPNZD Analysis: Pair Breaks Above 2.0000 As NZ Enters Into Lockdown](https://forextraders.guide/wp-content/uploads/2021/08/GBPNZD-Analysis.png)
- The GBP was boosted by a 0.8% increase in the PPI input for July 2021 (MoM) from a 0.5% rise in June 2021.
- UK house prices rose at an average of 13.2% in the year ended June 2021.
- The Reserve Bank of New Zealand (RBNZ) maintained the official cash rate (OCR) position at 0.25% after a Covid-19 case was realized.
The GBPNZD pair gained 0.71% as of 4:41 pm GMT on August 18, 2021, from the previous day’s close. It opened at 1.9851 and traded to a high of 2.0015 (representing a price change of 0.83%). The British pound was riding high, gaining 0.10% against the euro and 0.12% against the US dollar at the time.
Positive indicators
The British pound was boosted by a 0.8% increase in the producer price index (PPI) input for July 2021 (MoM) from a 0.5% rise in June 2021. It gained 9.9% in the annual analysis, seven beating estimates at 9.1%.
The monthly PPI output for July 2021 (MoM) remained unchanged for July 2021 at 0.6% but still managed to beat estimates at 0.4%. The PPI output rose 4.9% annually against an increase of 4.5% in July 2020.
The strong PPI figures were enough to offset the decline in the consumer price index (CPI) that fell to 2.0% from 2.5% (YoY). The annual CPI (not seasonally adjusted) remained unchanged at 111.30.
House price index
UK house prices rose at an average of 13.2% in the year ended June 2021.
![Increasing UK house price index for June 2021](https://forextraders.guide/wp-content/uploads/2021/08/Analysis1.png)
It rose from 9.8% realized in May 2021 and is regarded as the sharpest annual price growth in UK houses since November 2004.
June 2021 saw the mean price of UK houses jump by £31,000 to £266,000 from £235,000 in June 2020. England recorded the sharpest average rise at 13.3% (£284,000), Wales followed at +16.7% (£195,000), Scotland (+12.0%), and finally Northern Ireland (+9.0%).
In regards to taxation, properties worth more than £500,000 in England and North Ireland (post-Brexit) did not incur any tax. The threshold was lowered in Scotland and Wales where the no-taxation policy began in houses valued at more than £250,000.
Between March 2021 and June 2021, the mean UK prices had risen by £10,000 (+3.91%). Investors are looking for increased economic recovery with the GDP growth dependent on a stringent vaccination program against Covid-19.
UK Covid-19 cases have risen 10.31% (from 24,139 to 26,628) from August 1, 2021 to August 17, 2021.
![Decline in UK coronavirus cases since July 21, 2021](https://forextraders.guide/wp-content/uploads/2021/08/Analysis3.png)
The rate has still declined 38.65% since July 21, 2021, with the vaccination now at 61.3%.
RBNZ – no rate hike
The Reserve Bank of New Zealand (RBNZ) maintained the official cash rate (OCR) at 0.25%. Investors were worried about the decision to maintain the OCR after a highly anticipated rate hike projection.
Reports indicated that one new case prevented the central bank from raising the rate. The NZ government went ahead to impose a level-4 lockdown to be observed for 7 days. This case was discovered in Auckland, the first time since March 2021 (6 months).
The NZD went ahead to lose 0.34% against the Japanese yen and 0.61% against the US dollar.
Technical analysis
The GBPNZD pair is headed towards an upward breakout of the 2.0000 resistance. Continuation of the uptrend may see the price hit 2.0166.
![Technical analysis chart for GBPNZD](https://forextraders.guide/wp-content/uploads/2021/08/Analysis2-1024x479.png)
Pair moved above the 9-day EMA at 1.9818 to settle at 1.9976. There is an increase in buying pressure with the 14-day RSI at 56.53. We have noted an increase in volatility as the 14-day ATR is at 0.01654.
A reversal may force the pair to move to 1.9581 and, in case of a deeper correction, to 1.9176.
Leave a Reply