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- NZD moves up against the yen as risk sentiment improves
NZD moves up against the yen as risk sentiment improves
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Risky sentiment prevails, weakening the Japanese yen on all fronts, including against the New Zealand dollar. Crosses with the yen in particular remained strongly suppressed after the escalation of the trade war, but they are already showing signs of recovery. It also offers the opportunity to engage with long positions and take advantage of the weakening yen.
From a technical point of view, we had an early three line strike buy signal, with the bottom diagonal test at the ascending channel and the upward repulsion and the formation of Three White Soldiers - bullish formation. Now the price is at an important level at 23.6 Fibonacci, and here it is good to wait for the closing. The price also tests the upper diagonal of the ascending channel. Usually, before this formation continues, there will be a period of consolidation. Successful passage above 23.6 Fibo unlocks the potential for upward movement to the psychological barrier at 70 and the zone at 38.2 Fibonacci.
From a fundamental point of view, the FX markets will also expect a decision on RBNZ interest rates, and with volumes reduced to the event in two weeks, negative carry trades and security positions will become too expensive to hold.
Alternatively, if the price fails at 23.6 Fibo, it will potentially return back to the Pullback area at 66,700 and thus the bullish scenario will collapse.
Trader Martin Nikolov Read more:
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