You have no items in your cart.
NZD/JPY – Aiming for Fresh Multi-Year Highs
With the Reserve Bank of New Zealand expected to raise interest rates for the first time in years, NZD/JPY is poised for a big move this week. Most traders are positioned for a move higher in the currency pair and we believe that new multi-year highs are likely especially with last Friday’s non-farm payrolls report triggering renewed upside momentum in USD/JPY. Given that everyone expects the RBNZ to tighten, the upside in NZD is dependent on the central bank’s guidance. If they suggest that this marks the beginning of a longer period of tightening, NZD/JPY will soar. If they sound noncommittal, say that future movements are data dependent and complain about the strength of the currency, NZD/JPY could experience the classic buy the rumor sell the news type of post RBNZ price action. Considering that the central bank sees rates at 4.75% by March 2016 (current rate is 2.5%), we think that Governor Wheeler will reiterate his commitment to normalizing monetary policy, which is positive for NZD/JPY.
The closest level of resistance for NZD/JPY is Friday’s high of 87.95 and beyond there, we need to turn to the monthly chart for further resistance. The psychologically significant 90 level comes next followed by the 2007 high of 97.77. Support in the currency pair is at 86, the former resistance turned breakout level.