The New Zealand dollar continued to appreciate against its major currency counterparts this week following the rise in market sentiment however, deteriorating fundamentals paired with expectations for a rate cut by the Reserve Bank of New Zealand is likely to weigh on the exchange rate over the near-term.
[B]Currency Pair: [/B]NZD/JPY
[B]Chart: [/B]60 Min Charts
[B]Short-Term Bias:[/B] Flat
[B][U]Analysis[/U][/B]
The New Zealand dollar continued to appreciate against its major currency counterparts this week following the rise in market sentiment however, deteriorating fundamentals paired with expectations for a rate cut by the Reserve Bank of New Zealand is likely to weigh on the exchange rate over the near-term. After reaching a high of 65.32 in October, the NZD/JPY slipped to a low of 44.23 in February and we’ve seen the pair make two separate attempts to retrace the sell-off from the previous year, but the lack of momentum to break above 60.70-80 (78.6% Fib) may continue to hold the pair within a broad range over the near-term as investors weigh the outlook for future policy. Over the next few hours of trading, we may see the kiwi-yen push higher as global equities rise but nevertheless, as the RSI approaches overbought territory, gains are likely to be capped, and we could see the pair retrace the advances from the previous session to fill-in the gap from the 120 moving average. At the same time, the 20-Day and 50-Day SMA’s have both crossed above the 200-Day moving average, and the rising trend in the daily NZD/JPY chart could have the positional to lead the pair higher over the near-term. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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