Traders are negative on risk for the session on second wave concerns, pushing the Japanese yen higher against the majors, including NZD/JPY.
Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/JPY after downbeat data from the U.K., so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar for U.S. & Asia:
New Zealand Manufacturing Index at 10:30 pm GMT
Japan Industrial Production at 4:30 am GMT (June 11)
U.K. GDP & Manufacturing Production at 6:00 am GMT (June 11)
What to Watch: NZD/JPY
NZD/JPY is following that theme as the pair has been in a one-way move lower since the Asia open, falling nearly 100 pips since breaking below the 70.00 major psychological handle. Is there more room to run?
Well, without any more catalysts ahead, the trend has a low probability of reversing, but after a 100 pip move (right around the daily ATR of 97 pips), there is a chance of a pause.
For the bears on NZD/JPY, the ball is still in your court, but you may want to wait for a pullback before shorting. If we do see a bounce up to the 69.50 – 70.00 area and bearish reversal patterns, that’s a solid signal to put together a short position for both a short-term and swing play.
For the bulls on NZD/JPY, the trend is definitely not your friend, but if we see a shift back to positive risk sentiment (i.e., positive coronavirus vaccine/therapy news, more stimulus measures) and a better-than-expected NZ data vs. worse-than-expected JP data, then there’s a chance a rally could form on the pair.