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NZDJPY – On the way to 80.00?
USDJPY has been on a tear rising more than 600 points off the lows set just two weeks ago. The pair is driven higher by market’s unshaken belief that the Fed will hike rates in June and will continue to tighten policy for the rest of the year giving the dollar a key advantage in interest rate differentials.
Meanwhile, the kiwi looks to have found a solid bottom near the 6800 figure as it formed a double bottom support on the daily charts. The New Zealand economy has outperformed expectations over the past several months – so much so – that the RBNZ which meets tomorrow will have a hard time maintaining its dovish slant.
If the central bank decides that policy should shift to neutral and suggests that no further rate cuts are in the offing, the kiwi could see a strong rally towards the .7000 mark. That, in turn, should help lift NZDJPY towards key resistance at the 80.00 figure.