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Six straight days of gains for NZD/JPY
Catching a falling knife isn’t my style but it’s worked with NZD/JPY. The pair was the biggest percentage mover this week, climbing 2.3% in a rally to 72.41 from 70.60.
All the commodity currencies did well this week but the catalyst for the kiwi was the RBNZ, which opted to leave rates unchanged. The yen weakened as risk appetite grinded higher and yields stabilized.
Technically, NZD/JPY is now running into the June high and that should be a tough level to break. It also coincides with the 2018 quadruple bottom around the same levels.
Overall, this looks much more like a counter-trend squeeze then the start of a something for NZD/JPY. Sure, the Trump-Xi summit could end with smiles and handshakes but even it it all goes well, the Fed could end the party in a hurry.
I prefer the downside but there’s no rush and it’s better to wait and see what happens in Osaka.
