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The New Zealand Dollar depreciated about 46 base points against the US Dollar on Thursday. The decline was stopped by a support level formed by the 200-hour simple moving average at 0.6810.

The currency pair bounced off its lower boundary of a medium-term ascending channel pattern at 0.6810 during the end of yesterday's trading session and has since breached a significant resistance cluster at 0.6843 and gradually edging higher.

As for the near future, it is likely that the currency exchange rate might target the weekly resistance level at 0.6879.

The past trading week has overall been a grueling one, with swings in either direction for the British Pound. In what's been a pivotal week for Brexit, markets have learned of several key revelations in the ongoing saga. UK lawmakers do not want a no-deal Brexit; they do want to do delay the United Kingdom's departure from the European Union past the current deadline of March 29 buthave also rejected the option of a second referendum.

This does clear up a number of previously pending matters, although there is still uncertainty overwhether the European Union will oblige the incoming request from UK Prime Minister Theresa May to delay the March 29 deadline. The upcoming week does look like it will be just as crucial as the exhausting one now drawing to a close.

Theresa May is aiming to have Parliament vote on her Brexit deal for a third time by March 20, having already been rejected twice in two months. Should we see the old saying 'third time's a charm' prove true, Brexit will happen at some stage and this would likely spark a relief rally in the Pound.

However, a third rejection would represent even further embarrassment for UK politics and would be seen as a risk to leaving the United Kingdom exposed to a wide range of different political hazards. The least damaging one would be a soft Brexit finally being agreed upon after a long delay. Other political dangers could include the possibility of a call for a General Election. Another plea for the option of a second referendum coming back onto the table can't be completely ruled out, despite that option being rejected in Westminster just yesterday evening.

Next week will also see several meetings taking place between EU leaders, and there is a risk that perhaps one of the 27 member states will reject the request for an extension because they are dissatisfied with the purpose behind delaying a process that has dragged severely over the past two years. Such a potentialspanner in the works could send GBPUSD spiraling back below 1.30 very suddenly and such a move could also send the Pound trembling back towards its December 2018 lows of 1.25.

All these possibilities suggest investors will have their hands full with trying to react to the fluidity of the ever-changing Brexit situation. Those sat at their trading desks will remain discouraged from taking any type of long-term view on the Sterling.

Overall,volatility will be at risk of remaining as the order of the day for the UK currency.

Pound is on the move to give away some recent gains, potentially heading to 1.3050 area to USD

British Parliament voted to send Theresa May to Brussels to ask for a Brexit respite. This step should also be considered as an attempt to buy some time to increase the number of her supporters. At the same time, the Parliament once again blocked the new referendum. These events probably became the main reason for the weak pound performance after the final vote.

GBP remains near 1.3240, the highs of the last eight months.

What's next with Brexit?

Next Tuesday, the twice rejected plan will face with the third vote. If the exit plan won't be approved this time, May will go to Brussels to ask for a Brexit date postpone. It is likely that the EU will give this time to U.K., but still, possibility of ‘no’ cannot be completely excluded.

It is predicted that if by March 20, the British Parliament adopts EU divorce plan, the exit itself will occur on June 30. If the head of government fails to enlist the support of the majority of parliamentarians, Brexit can be shifted to a later date. Again, if the EU agrees.

What does technical analysis say?

It is difficult to say that the markets were afraid of such uncertainty, but still, it is worth paying attention to the GBP vulnerability. Earlier in the week, the British currency reached 8-month highs against the dollar, and is now vulnerable to correction, rolling away from recent peaks.

Earlier this day the GBPUSD pair fell to 1.3200 against the peak 1.3280 on Wednesday. As for the technical analysis, the pair is in a trend for growth, with support around 1.3050. The caution of the players before the next week opens the way to a decline in this area. Falling below 1.30 may open the way to a deeper decline with possible testing of 1.2500.

The UK Parliament approved the government's motion for a delay of the Brexit date and the pound remained relatively stable. The motion provides the option for the government to ask the EU for a short delay if Parliament can agree to a Brexit deal by March 20th, or a longer delay if no deal can be found. Analysts point out that there already was a soft consensus in the market about the possible delay of the Brexit date. The motion implies that there will be a third vote on Theresa May's deal once again before she meets her EU counterparts on the 21st and 22nd of March, probably Wednesday the 20th. We expect volatility to continue for GBP pairs reaching new highs, probably during the prementioned dates. Cable was somewhat volatile yesterday yet remained below the 1.3265 (R1) resistance line. We could see the pound taking a breather today and the pair maintaining a sideways movement, yet at the same time cable could prove sensitive to any further developments regarding Brexit. Should the bulls be in charge today, we could see cable breaking the 1.3265 (R1) resistance line and aiming for the 1.3350 (R2) resistance level. Should the bears take over, we could see the pair breaking the 1.3175 (S1) support line and aim for lower grounds.

BoJ remains on hold and the yen remains stable.

BoJ remained on hold as was widely expected early during the Asian session today, however sounded a bit dovish. The bank tweaked its assessment on the Japanese economy, as it cut its assessment on exports and output. The decision and most of the assessments where expected by the market, hence had little effect on the JPY. We expect that volatility may occur during Governor Kuroda's press conference later on, especially should he show his readiness for further easing of the monetary policy if necessary. Please be advised that there may have been an effect on the pair by statements made by North Korean officials early this morning, that Kim Jong Un may be rethinking the moratorium on missile launches. We could see the JPY weakening should there be extensive dovish comments from BoJ Governor Kuroda. USD/JPY maintained a sideways motion yesterday and during the Asian session today, staying close yet above the 111.40 (S1) support line. We expect the pair to retain a bound range motion today, yet the pair could have some bullish tendencies today, should the BoJ governor maintain a dovish tone during his press conference and speech today and should the financial releases favour the USD side of the pair. Also the pair could be affected by any safe haven flow relating to the JPY. Should the pair come under the market's selling interest, we could see it breaking the 111.40 (S1) support line and aim for the 110.15 (S2) support level. Should on the other hand, the market favour the pair's long positions, we could see it aiming if not breaking the 112.55 (R1) resistance line.

Today's other economic highlights

In today's European session we get Germany's WPI rate for February and Eurozone's final CPI rate for February. In the American session, we get from the US the NY Fed Mfg Index, the industrial production growth rate, the preliminary university of Michigan consumer sentiment indicator for March and the Baker Hughes active oil rig count. Also in the American session today we get from Canada the Manufacturing sales growth rate for January. Please note that during the European session BoJ governor Kuroda will be speaking twice and also that the EIA monthly report is due out and could affect the markets. On Monday during the Asian session, we get from Japan the trade balance for February and the final reading of the industrial production for January.

GBP/USD

Support: 1.3175 (S1), 1.3070 (S2), 1.2990 (S3)
Resistance: 1.3265 (R1), 1.3350 (R2), 1.3450 (R3)

USD/JPY H4

Support: 111.40 (S1), 110.15 (S2), 1109.20 (S3)
Resistance: 112.55 (R1), 113.70 (R2), 114.50 (R3)

EUR/USD

Current level - 1.1320

I favor a slide towards 1.1270 static support and a violation of the latter will challenge 1.1215 area. Key resistance remains projected at 1.1350.

USD/JPY

Current level - 111.64

My outlook is bearish, for a break through 111.45 support, towards 110.80, en route to 110.20.

GBP/USD

Current level - 1.3211

The static support at 1.3190 is currently guarding the positive bias, for a rise towards 1.3450. A dive below the mentioned level will challenge 1.3050.

ECB Governing Council member Olli Rehn urged the central bank to rethink it's policy framework after failing to lift inflation back to target. One explanation for the failure could is that "trust in central banks' ability to influence the inflation rate may have eroded."

He noted that "the interdependence of economic activity and inflationary pressures seems to have weakened in recent years." And, "should this phenomenon prove to be lasting, it would imply a weakening of the impact monetary policy exerts on inflation via aggregate demand."

But he also emphasized that "this would not mean questioning the primary objective of price stability". Instead, the policy rethink would "entail a comprehensive review of the guiding principles, key assumptions and tools used for the implementation of monetary policy".

• Sterling retreats lower despite Parliament voting to extend Article 50 as investors eye EU summit and third meaningful vote next week
• Risk sentiment boosted by 'substantive progress' in US-China trade talks but disappointment that there will be no March summit
• Gold back above $1300 after North Korea says may suspend denuclearisation talks with US

Pound fails to resume rally after MPs vote to delay Brexit

British lawmakers on Thursday voted to extend the Article 50 process as expected, which, together with Wednesday's vote to reject a no-deal Brexit, significantly minimises the risk of the UK crashing out of the European Union without a deal. However, with the outcome of the two votes already priced in, there's been little fresh upside triggers for the pound over the past couple of days.

In fact, there was some disappointment that all of the amendments put forward yesterday were defeated in a victory for Prime Minister Theresa May. MPs rejected the amendments calling for a second referendum and to hold indicative votes on the different Brexit options. This keep's May's deal alive and there will now be a third meaningful vote on the Withdrawal Agreement, most likely on March 20.

In what could be a possible game changer for the government, the attorney general is reportedly preparing to update his legal advice on the Irish backstop, which could state that the UK would be able to use the Vienna Convention to leave the backstop unilaterally. If this was able to secure the backing of the small Northern Irish DUP party who are propping up May's government, Brexiteer Conservatives may also decide to support the deal.

However, not all investors are holding their breath given the deep divisions in the Conservative party. Plus, apart from talking round her own party, May will also need to convince EU leaders to grant her an extension to the exit date at an EU summit next week.

The pound was last trading flat at 1.3235 versus the dollar, while against the euro, it was 0.2% weaker at 0.8554 pounds per euro.

Stocks rise on China tax cuts, progress in trade talks

Asian and European stocks were mostly in positive territory on Friday, lifted by trade headlines, as well as from China pledging additional support for the economy. US Treasury Secretary Steven Mnuchin told a Senate Committee hearing that the US and China are trying to reach a deal 'as quickly as possible' but said a summit in March between the US and Chinese presidents will not go ahead because more time is needed for the negotiations. Chinese media also reported that further 'substantive progress' has been made, while President Trump suggested that it could be another 'three to four weeks' before an announcement comes.

The news helped the Australian dollar move higher, climbing to $0.7087, though the market response was somewhat muted given the lack of clarity on the timeline. In the meantime, China's Vice Premier Li Keqiang said it will implement the recently announced VAT cut for manufacturers from April 1 and promised more measures to boost the economy.

Gold and yen up as North Korea may pull out of denuclearisation talks

Gold prices rose 0.5% on Friday, recovering back above the $1300 level on reports that North Korea is considering suspending talks with the US on denuclearising. Furthermore, a North Korean official was reported as saying the country may soon resume missile tests.

The safe-haven yen also rose on the news, which was additionally supported from the Bank of Japan standing pat at its March policy meeting. Although the BoJ raised concerns in its statement about slowing exports and weak overseas growth, there were no clues of an imminent easing in policy. This briefly helped the yen firm to 111.48 per dollar before easing to 111.68 per dollar.

The dollar/yen pair is likely to be sensitive to a raft of data releases due out of the US later today as recent numbers have been painting a mixed picture for the US economy.

UK Cabinet Minister David Lidington told BBC radio the default for the government is still to leave the EU on March 29. He said "I hope still we can leave as soon as possible in an orderly fashion but that depends upon parliamentary approval both in principle of a withdrawal agreement but also then the implementing legislation that has to follow before lawfully we can ratify that treaty".

And, by the end of March we have to have an alternative in place, not just a resolution of the House of Commons, a preference, but a solution in place that enables us to have an extension so there isn't crash out on March 29."

German Justice Minister Katarina Barley told rbb broadcaster that "the EU would be ready to delay Brexit, but one has to have a plan on what is supposed to happen during this period." She added that delaying Brexit doesn't bring a solution.

The terrorist attacks over in New Zealand has stunned the markets. New Zealand is a peaceful county, we do not usually hear about hate crime and this is where the danger is. This is because if these hate centric attacks can take place in a country which has a population of 5 million, the impact on the markets could be catastrophic if it occurs in a far bigger country. Thus, there is a strong need for appropriate actions to be taken in order to stop these violent attempts.

New Zealand’s Prime minister has stood against this, and we need a united front from other world leaders to restore confidence. This is the area which needs the most amount of attention, breaking the walls of hate can only put an end to these types of violence.

As a result of the above, investors are seeking shelter under safe haven assets. The NZD/USD has fallen sharply. The gold price has spiked. It is well above from its weekly low of 1290, currently trading at $1303.

In the post meeting press conference, BoJ Governor Haruhiko Kuroda admitted that "Japan's exports and output are being affected by lean overseas growth". However, he also pointed out "domestic demand continues to grow." Hence, BoJ maintained the baseline view that "economy is expanding moderately". Though, regarding inflation he said "it is likely to take longer to achieve our target".

Kuroda also defended BoJ's policy and noted "We are not saying that we only care about achieving our price target." Instead, BoJ's goal is that "prices should rise gradually, reflecting an improvement in corporate profit and job growth rate". For now, there is no need to make any change to the price target.