NZD/JPY
Greetings to all ForexLive readers. I have just returned from holiday and it is good to be back in the markets.
NZD/JPY looks very bearish today and is worth having on your watch list. Earlier this week, on Wednesday, the Bank of New Zealand surprised markets with a more dovish stance than was anticipated. The key takeaway line for me was that the bank intended to, 'keep the OCR at this level through 2019 and into 2020 longer than we projected'. The reaction since Wednesday has been a strong sell off in the NZD as a more bearish view is factored in. If you missed the RBNZ rate announcement and associated releases you can re-cap here via Eamonn's coverage. And here for a page with links to associated coverage.
JPY has been bid on the beat of it's Q2 preliminary data release. Yes, their deflator read was bad, but the market has focused on their strong growth. Check out the report here. The other benefit of pairing the NZD with JPY is that any risk off sentiment will lend itself to JOY strength. Given the constant spats between the US and China there is a strong chance of risk off sentiment hitting at some point over the next few sessions.
So, let's look at the technicals. The best region I can see is entering short at 73.92. This is the Daily Pivot point, near a daily support level (red horizontal line) and just shy of the 100 Daily Moving average (blue) on the 1 hour chart. Risk can be limited to around 50-60% of the Average Daly Range.
