Last week was marked by a sharp rebound in the New Zealand currency, better known by the gentle name of Kiwi. Out of respect for the people of New Zealand, we should be careful not to compare them with a fruit that is delicious and richer in vitamin C than an orange.

KiwiKiwi
A kiwi merged with a kiwi (Illustration Midjourney / MarketScreener)

Sheep and kiwis

But I digress, let's get back to our sheep. The Kiwi didn't just bounce against the dollar above 0.6100 to rally to its resistance at 0.6317/38. In fact, it also rallied against the Japanese Yen, Euro, Aussie and Sterling. If you like it, you don't count it, and kiwi fruit is low in calories. That being said, the serious stuff starts now. Until now, we can consider the movement operated these last two weeks as a simple technical recovery (understand temporary) and that in fact, the kiwi is facing a nice resistance zone against the above mentioned currencies: 0.6317/38 against the dollar, 85.95 against the yen, 0.5710 against the euro or 0.5024/40 against the GBP. Only if these technical thresholds are breached will a more significant recovery be possible. In the meantime, any sign of weakness can be used to take advantage of the medium-term trend.

Kiwi

For its part, the pound sterling is still trying to regain a place in the sun and hopes to take advantage of the next Bank of England council to achieve this. Expectations are also for a 25 basis point increase, certainly followed by others in order to effectively fight inflation. Such a scenario should indeed allow the GBPUSD to continue its (slow) progress since the breakout of 1.2419/45.