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NZD/JPY – Heading to 86.00?
The kiwi has recovered slowly but steadily ever since the pair hit 7700 on intervention fears a few weeks back and has now come back all the way to 7900. The general decline in US rate expectations has been a help, but the relatively upbeat data out of Asia has been a support as well. This week the pair will see ANZ business confidence and RBNZ Rate statement report on Wednesday and while its likely that Governor Wheeler will reiterate that the kiwi remains overvalued he is unlikely to make further threats of intervention for the time being. Meanwhile USD/JPY was taken down a notch today on weaker housing data but tomorrow’s Durable Goods and Consumer Confidence reports should provide a boost for the pair. Taken together that means that 86.00 may be in view.
Technically NZD/JPY has set a higher double bottom which is a bullish sign and if the pair can hold above 85.50 then 86.00 would come into view. On the downside support lies at 84.50 with much deeper support at 83.0