My picks: Range Trade NZD/JPY - Short Entry
Expertise: Fundamentals and Technicals
Average Time Frame of Trades: 2 - 10 Days
The rally in the NZD/JPY from the previous week stalled ahead of 60.70-80 (78.6% Fib of 44.23-65.32), and the lack of momentum to retrace the sell-off from the previous year is likely to hold the pair within a broad range over the near-term as investors weigh the outlook for future policy. As economists forecast the Reserve Bank of New Zealand to ease policy further in June, expectations for a 25bp rate should lead the pair back towards the lower-end of its range over the remainder of the month as the central bank maintains a dovish policy stance. As a result, I have placed a short entry at 57.72, the 20-Day SMA, and have placed my target at 55.21, the May low, with the stop at 58.40, the 5/20 high.
