The New Zealand dollar pushed higher against the Japanese yen this week as investors raised their appetite for higher yielding assets, and the NZD/JPY may continue to push higher throughout the second-half of the year as market participants anticipate the Reserve Bank of New Zealand to tighten monetary policy next year.
[B]Currency Pair:[/B] NZD/JPY
[B]Chart:[/B] 60 Min Charts
[B]Short-Term Bias:[/B] Bullish
[B][U]Analysis[/U][/B]
The New Zealand dollar pushed higher against the Japanese yen this week as investors raised their appetite for higher yielding assets, and the NZD/JPY may continue to push higher throughout the second-half of the year as market participants anticipate the Reserve Bank of New Zealand to tighten monetary policy next year. After reaching a high of 74.59 on 9/8, the kiwi-yen slipped to a low of 44.23 in February as investors turned risk aversion however, the rebound in market sentiment paired with higher commodity prices have supported demands for carry trades, and the pair may continue to retrace the decline from the previous year as the outlook for a global recovery improves. At the same time, Credit Suisse overnight index swaps are up by more than 100bp, and the rise in the interest rate outlook may lead the pair to test the yearly high (65.94) in the month ahead as the RBNZ continues to keep rate on hold. Over the next few hours of trading, we may see the pair continue to push higher to retrace the sell-off from earlier this month however, as the RSI approaches overbought territory, gains are likely to be capped, and we may see the pair fall back to fill-in the gap from the 120-SMA at 64.16. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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