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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
NZDJPY
NZD/JPY staged a round trip from Y76.56 on Monday, driven by gyrations in risk appetite. The rate sold off in the first half of the day, as Sino-U.S. tensions and China's crackdown on some education firms undermined broader sentiment. This was followed by a dynamic rebound, as risk appetite returned, but NZD/JPY struggled to make much headway beyond last Friday's high of Y77.29.
- The rate last sits at Y77.27, virtually unchanged on the day. Losses past Jul 22 low of Y76.51 and the 200-DMA at Y75.94 would shift bearish focus to the 23.6% retracement of the 2020 - 2021 valley-to-peak rally at Y75.31. This key layer of support limited losses on Jul 20 and in early/mid-Feb. Meanwhile, bears keep an eye on the descending 50-DMA, which is approaching the nearby 100-DMA.
- On the flip side, should bulls manage to force a break above Jul 14 high of Y77.66, they could set their sights on Jul 6 high of Y78.77. A clean break here would suggest that bulls are taking control.
- Signs of topping out can be noticed on the monthly chart, with the rate losing some ground after forming a bearish engulfing candlestick pattern (see chart below). This technical pattern materialised after the 50-MMA crossed below the 200-MMA, forming a death cross. Further technical signals will be eyed for confirmation if this recent pullback has potential to turn into a deeper sell-off.
Fig. 1: NZD/JPY (monthly chart)
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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