NZD/JPY & NZD/USD positive correlation returns for now
NZD/JPY pulls back from a fresh weekly high (83.92) with NZD/USD also registering a fresh weekly high (0.6382) as the Reserve Bank of New Zealand (RBNZ) delivered a 50bp rate hike.
The correlation coeffect now reflects a positive relationship between NZD/JPY and NZD/USD as it climbs to +0.46, but the inverse relationship may resurface as a shift in carry-trade interest appears to be materializing alongside expectations for a change in monetary regimes.
NZD/JPY Rate Outlook
NZD/JPY struggled to hold above the 50-Day SMA (83.34) after failing to extend the series of higher highs and lows from last week, with the exchange rate trading to a fresh weekly low (82.15) as the Japanese Yen appreciates against most of its major counterparts.
Need a close below the 82.30 (23.6% Fibonacci extension) to 82.50 (38.2% Fibonacci extension) region to raise the scope for a move towards towards 81.70 (50% Fibonacci retracement), with a break below the yearly low (80.44) opening up the 80.20 (61.8% Fibonacci retracement) region.
In contrast, NZD/USD may face range bound conditions as it holds above the weekly low (0.6208).
--- Written by David Song, Strategist
Follow on DavidJSong
DavidJSong
The correlation coeffect now reflects a positive relationship between NZD/JPY and NZD/USD as it climbs to +0.46, but the inverse relationship may resurface as a shift in carry-trade interest appears to be materializing alongside expectations for a change in monetary regimes.
NZD/JPY Rate Outlook
NZD/JPY struggled to hold above the 50-Day SMA (83.34) after failing to extend the series of higher highs and lows from last week, with the exchange rate trading to a fresh weekly low (82.15) as the Japanese Yen appreciates against most of its major counterparts.
Need a close below the 82.30 (23.6% Fibonacci extension) to 82.50 (38.2% Fibonacci extension) region to raise the scope for a move towards towards 81.70 (50% Fibonacci retracement), with a break below the yearly low (80.44) opening up the 80.20 (61.8% Fibonacci retracement) region.
In contrast, NZD/USD may face range bound conditions as it holds above the weekly low (0.6208).
--- Written by David Song, Strategist
Follow on DavidJSong
DavidJSong
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