Not much jumping out at me at the moment for immediate live plays, but the price action on NZD/JPY has my attention ahead of top tier events next week!
Watchlist: Resistance at 75.00 on NZD/JPY?
Fundamentally, I’m bearish on the Kiwi vs. the yen because of upcoming top tier data, mainly New Zealand’s quarterly CPI read next week. Inflation readings around the world have been coming in weaker-than-expected, so I expect a weaker number from the Kiwi’s as well. This could preempt a move lower in the Kiwi ahead of the event, or maybe even a bearish reaction to it. We’ll just have to wait and see.
We also have the Bank of Japan’s monetary policy statement next week, but it’s likely they’ll stay on course with rhetoric from their last meeting; that they will focus on achieving their price targets and that there is no need to exit easy money policy at this time. So, it’s not likely to be a market mover, but any central bank monetary policy meeting should always be on the radar in case we get any surprises because the reactions to surprise central bank events can be pretty big.
So right now, the odds are good we’ll see volatility pick up in NZD/JPY in the next week or two, and always remember that this pair will tend to have a strong correlation to global risk sentiment because of the yen’s “safe haven” status among traders, so geopolitical news will also be catalysts to look out for.
For a trade, again I’m bearish on the pair, but with the current risk-on momentum we’re seeing in the global markets, I’m cautious with my entry. That’s why I’m waiting to see if the pair will hit the major area interest around the psychological level of 75.00, which has been a battleground for traders since the summer of 2018.
Will we get to see NZD/JPY hit 75.00 next week? And if we do, will sellers take control once again?
We’ll just have to wait and see, and if it does retest I’ll re-assess and possibly throw up some orders if it makes sense. Stay tuned for that and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do. Good luck and good trading!
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