GBPNZD Short Idea

13 gen 2020

Here is a trade idea I had on GBPNZD, short.
My fundamental analysis is the following:

GBP (Great Britain Pound):
(N) - Brexit, a problem that will be fixed, but will create another one which is a trade deal with the EU, which currently has a lot of uncertainty.
(N)- Markit Manufacturing PMI 47.5 (vs. 47.4 previous), has to be over 50 to be positive. (Jan 02)
(P)- Markit Services PMI 50.0 (vs. 49 previous) (Jan 06)
(N)- BOE MPC member Vlieghe says he is ready to cut interest rates if data does not improve. (Jan 12)
(N)- Croatia’s PM threatens to block London access to EU markets. (Jan 12)

Overall: GBP - BEARISH, because of Brexit trade deal uncertainty and overall bad economic data. Also, there is a possibility of a rate cut, and threats of closing the EU market to London.

NZD (New Zealand Dollar):
(P)- Phase One Deal to be signed on January 15th.
(P)- Trade Balance (YoY) -4.82B (vs. -5.04B previous) (Dec 18)
(P)- GDP YoY 2.3% (vs. 2.1% previous) (Dec 18)
(P)- GDP QoQ 0.7% (vs. 0.5% previous ) (Dec 18)
(P)- GDT Price Index 2.8% (vs. -5.1% previous) (Jan 07)
(P)- Total Filled Jobs 2.21M (vs. 2.16M previous) (Jan 09)

Overall: NZD - BULLISH, because of US-China Phase One Deal signature an overall good and improving economic data.

So, fundamentally GBP is a weak currency, and NZD is a strong currency, thus why GBPNZD Short should make a good trade.