FxWirePro: NZD/JPY extends range trade, weakness only below trendline support at 73.60
NZD/JPY remains stuck in its multi-week range of 76.84-73.54 although recent signs point to a test of the downside ahead. Data on Monday showed that NZ confidence and building consents deteriorated significantly bolsteri…
NZD/JPY remains stuck in its multi-week range of 76.84-73.54 although recent signs point to a test of the downside ahead.
Data on Monday showed that NZ confidence and building consents deteriorated significantly bolstering the case for more RBNZ easing in the upcoming month.
There is scope for RBNZ to ease twice this year, but markets have fully priced in only one cut, making further downside vulnerable.
On the other side, the Japanese Yen remains in demand on the back of the extension of risk-off trades amidst poor Chinese data.
Technicals are inconclusive, immediate resistance is seen at 74.97 (5-DMA) and then 75 (10-DMA).
73.60 is strong trendline support on the downside, and breaks below could accentuate downside, test of 73.20 and then 72.42 levels then likely.
Recommendation: We remain on the sidelines for now, await further confirmation to go short.
