The Japanese yen strengthened against its major currency counterparts this week following the drop in market sentiment, and the NZD/JPY may continue to push lower over the week as investors curb their appetite for high-yielding assets.
Currency Pair: NZD/JPY
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis
The Japanese yen strengthened against its major currency counterparts this week following the drop in market sentiment, and the NZD/JPY may continue to push lower over the week as investors curb their appetite for high-yielding assets. After reaching a high of 65.32 in October, the kiwi-yen slipped to a low of 44.23 in February, and the lack of momentum to push back above 60.80-90 (78.6% Fib) paired with the downturn in market sentiment is likely to hold the pair within a broad range over the near-term as investors expect the Reserve Bank of New Zealand to lower the benchmark interest by another 50bp later this month. Over the next few hours of trading, we are likely to see the pair hold near 57.20-30 (61.8% Fib) and may attempt to build short-term support near this level however, as the futures market foreshadows another day of declines for global equities, safe-haven flows are likely to weigh on the kiwi-yen as investors turn risk adverse. As a result, a break below the 61.8% Fib should lead the NZD/JPY to retrace the rally from the previous week, and we may see the pair fall towards 54.70-80 (50.0%) to test for support. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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