NZD/USD And NZD/JPY Analysis: April 12, 2018
FxPro Financial Services Ltd | Apr 12, 2018 08:00AM ET
The New Zealand dollar (NZD) broke higher on Tuesday, as China seemed to calm down trade war rhetoric with the U.S. It could be argued that President Trump is now pre-occupied with geopolitical issues involving Russia and Syria. Chinese President Xi Jinping delivered a speech at the Boao Forum for Asia earlier this week and said China’s markets will be opened further. This is positive for trade-sensitive currencies such as the kiwi. The NZD climbed to 2-month highs against the USD, to trade over 0.7350, as the release of slightly hawkish FOMC meeting minutes did little to lift the U.S dollar. U.S. Treasury yields have seen some declines, resulting in increased demand for the kiwi. However, both countries have their interest rates set at 1.75% and the Federal Reserve is expected to carry on hiking rates this year.
NZD/USD
In the 4-hourly timeframe, NZD/USD broke out above resistance at 0.7350 and confirmed it as support. NZD/USD looks likely to continue higher towards the 0.7500 handle, with major resistance at 0.7435. However, a bearish reversal and break of 0.7350 will find downside support at 0.7320 and then 0.7300.
NZD/JPY
In the 4-hourly timeframe, NZD/JPY broke above 78.60 and confirmed it as support. The pair has now broken out of a bull flag pattern and is set to climb towards resistance at 79.25, followed by 79.70. If the rally fails and drops back below 78.60, downside support will be found at 78.15 and 77.60.
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