New Zealand dollar fails at previous trendline against yen
The New Zealand dollar tried to rally to kick off the week on Monday but has failed at the previous trendline against the Japanese yen. It is because of this that we are likely to continue to consolidate overall, with perhaps an eye on the ¥75 level underneath which has been support. Ultimately, this could be a bit of “market memory” as we tend to see at these major inflection points.
It coincides quite nicely with the ¥76 level, which of course is a large, round, psychologically significant figure, and of course breaking through the trendline and testing it several times suggests that we could see quite a bit of volatility. At the other side of the equation, if we can break above the 76 level, then it will more than likely go looking towards the recent highs, so it’s a bit of a “binary trade.”
The support level at the ¥75 level is relatively strong, and somewhat deep, offering about 40 pips worth of buying pressure. If we were to break down below that level then we are probably going to go looking towards the 73 young level based upon historical trading. To the upside, even if we do break above the ¥76 level, the ¥77 level is even more resistive, so having said that it’s likely that the it would be more or less a short-term opportunity and then perhaps a better selling opportunity from a longer-term standpoint. That being said, it looks as if we are ready to roll over in the short term and at the very least consolidate in a 100 point range. Recently, the Royal Bank of New Zealand has suggested that the next move could be a rate cut, so that of course would weigh upon the Kiwi dollar.
It coincides quite nicely with the ¥76 level, which of course is a large, round, psychologically significant figure, and of course breaking through the trendline and testing it several times suggests that we could see quite a bit of volatility. At the other side of the equation, if we can break above the 76 level, then it will more than likely go looking towards the recent highs, so it’s a bit of a “binary trade.”
The support level at the ¥75 level is relatively strong, and somewhat deep, offering about 40 pips worth of buying pressure. If we were to break down below that level then we are probably going to go looking towards the 73 young level based upon historical trading. To the upside, even if we do break above the ¥76 level, the ¥77 level is even more resistive, so having said that it’s likely that the it would be more or less a short-term opportunity and then perhaps a better selling opportunity from a longer-term standpoint. That being said, it looks as if we are ready to roll over in the short term and at the very least consolidate in a 100 point range. Recently, the Royal Bank of New Zealand has suggested that the next move could be a rate cut, so that of course would weigh upon the Kiwi dollar.