The NZD/JPY pair experienced a sharp reversal from its recent two-week high reached on Wednesday, following the surprise 25 bps rate cut by the Reserve Bank of New Zealand (RBNZ). Despite a positive risk sentiment in the markets, the pair remains under pressure, down 0.80% for the day and trading in the mid-0.8800s during the European session.
The equity market’s optimistic tone and reduced likelihood of a Bank of Japan interest rate hike this year have weakened the safe-haven Japanese Yen, providing some support to the NZD/JPY pair. However, the RBNZ’s dovish stance suggests further rate cuts in the future, impacting the pair’s outlook. From a technical standpoint, the NZD/JPY pair faces resistance near the 89.50 level, with a break above signaling bullish momentum towards 90.00 and beyond.
On the downside, a breach below 88.00 could expose the pair to sub-87.00 levels, indicating a bearish trend. While daily chart oscillators show signs of recovery, any upward movement may be short-lived, making it a potential selling opportunity for traders. Overall, the NZD/JPY pair remains vulnerable to market fluctuations, with key levels to watch for potential breakouts in either direction.
NZD/JPY Daily Chart
New Zealand Dollar FAQs
The New Zealand Dollar (NZD), or Kiwi, is influenced by various factors such as the country’s economic health, central bank policy, Chinese economy performance, dairy prices, and macroeconomic data releases. The RBNZ’s goal of maintaining inflation within a target range, interest rate differentials, and market sentiment also play a crucial role in shaping the NZD’s value.
Investors should monitor economic indicators, geopolitical events, and market trends to make informed decisions when trading the NZD/JPY pair. Understanding the underlying factors driving currency movements can help individuals navigate the forex market effectively and optimize their investment strategies.