- Kiwi tumbles across the board on RBNZ jawboning & ongoing North Korea tensions.
- RBNZ this morning kept the OCR on hold at 1.75%, as was widely expected and kept OCR forecast unchanged.
- Markets initially perceived the statement was less dovish than expected, which caused the initial spike in the Kiwi.
- In the statement that followed, the RBNZ made it clear that it would like to see a lower NZD and kept intervention option open, weighing heavily on the bird.
- NZD/JPY has broken 200-DMA support at 79.97 to hit fresh 8-week lows at 79.75.
- Technical studies still heavily bearish. Decisive break below 200-DMA could see drag upto cloud at 79.47.
- Bearish invalidation seen on close above 5-DMA at 81.03.
Support levels - 79.47 (cloud base), 79, 78.79 (61.8% Fib retrace of 75.626 to 83.910 rally)
Resistance levels - 79.97 (200-DMA), 80.44 (38.2% Fib retrace of 69.232 to 83.910 rally), 81.02 (5-DMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-JPY-breaks-below-382-Fib-eyes-200-DMA-at-7995-stay-short-844309) has achieved intended targets.
Recommendation: Book partial profits. Lower trailing stops to 80.45, stay short for 79.47/ 79.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -133.73 (Bearish), while Hourly JPY Spot Index was at 89.621 (Slightly bullish) at 0840 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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