New Zealand Dollar Shows Resiliency Against Japanese Yen
Forex4you | Mar 08, 2019 01:01PM ET
During the Friday session, we saw a general “risk off” move, especially after the jobs number in the United States failed to impress. As per usual, the New Zealand dollar was used as a proxy for risk appetite, and it crashed immediately into the 75 handle. However, this is a market that has seen action at this level before and is looking quite stable in that general vicinity.
By the time we got to afternoon trading in the United States, we have cleared the 75 handle by good 50 pips and now are forming a hammer for the daily candle stick. That being the case, we are hovering at the 200-day EMA and it looks like we will probably try to rally from here.
Sellers below the 75 handle of course will come out of the woodwork but right now it looks like we are much more likely to see 76.50 than that break down. This obviously will tie in with how risk appetite flows forward, but one thing that should be noticed is that although the yen strengthened against the US dollar, we have seen some stabilization over there as well. (The USD/JPY pair of course being the proxy for overall yen strength.)
At this juncture, as long as we can stay above ¥75, it’s very likely that the New Zealand dollar will try to rally toward the ¥77 level, an area where we had seen a massive break down before, which I have marked by the ellipse on the chart. I would expect a significant amount of resistance there but these areas do like to be retested eventually, so it would make sense that over the next couple of weeks we will probably head in that general direction. While it may not be immediate, it should offer you plenty of “buy on the dips” opportunities.
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