Short-Term Forex Technical Outlook: NZD/JPY

The New Zealand dollar weakened against its currency counterparts this week and pared gained against the Japanese Yen after reaching a high of 63.00, and the NZD/JPY may continue to hold a broad range over the near-term as investors weigh the outlook for global growth.

[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 weakened against its currency counterparts this week and pared gained against the Japanese Yen after reaching a high of 63.00, and the NZD/JPY may continue to hold a broad range over the near-term as investors weigh the outlook for global growth. After reaching a high of 74.59 on 9/8, the kiwi-yen slipped to a low of 44.23 in February following the rise in risk aversion, but the rebound in market sentiment throughout the first half of the year has helped to drive demands for carry trades, and the pair may continue to retrace the sell-off from October as the Reserve Bank of New Zealand anticipates an economic recovery later this year. However, as the isle-nation faces its worst recession in over three decades paired with a weakening outlook for global trade, the central bank may take additional steps to shore up the $128B economy as the appreciation in the exchange rate hampers the outlook for a recovery. Nevertheless, we may see the NZD/JPY retrace the sell-off this week and fill-in the gap from the 120-SMA at 61.96 as the RSI approaches oversold territory, and the pair may make another attempt to push back above 63.00-10 (38.2% Fib) over the following week as investors anticipate the RBNZ to keep a floor on the benchmark interest rate going forward. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

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