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A surprisingly dovish meeting minutes from the RBA weighed on both the Aussie and Kiwi today.

Can NZD recover some of its damage against the yen in the next few hours?

Before I show you what setup I’m looking at, here’s a list of the market movers during the Asian session:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • Switzerland’s trade balance at 6:00 am GMT
  • Germany’s PPI at 8:00 am GMT
  • Eurozone current account at 8:00 am GMT
  • U.S. building permits and housing starts at 12:30 pm GMT

What to Watch: NZD/JPY

NZD/JPY 1-hour Forex Chart
NZD/JPY 1-hour Forex Chart

In case you missed it, the Reserve Bank of Australia (RBA)’s meeting minutes just revealed that the central bankers have not only considered an interest rate cut in October, but they’ve also talked about buying longer-term government bonds!

You can certainly understand why the Aussie would fall at the news. But why the heck did the Kiwi receive almost equal treatment from the bears?

For one thing, New Zealand is a bit more successful in containing the virus and has had to implement fewer lockdown measures. What’s more, it’s not New Zealand’s exports that China is reportedly banning lately.

If market bulls realize that NZD/JPY has almost used up its average ATR today and they realize that New Zealand’s prospects aren’t as bleak as Australia’s, then NZD/JPY could find support at the 69.25 handle that has been serving as support and resistance since late September.

If traders continue to price in rising coronavirus cases in the Eurozone and the lack of U.S. stimulus and Brexit agreements, however, then NZD/JPY could break below its key inflection point and head towards its 68.90 or 68.65 previous areas of interest.