Today we have the official cash rate decision and Monetary Policy Statement by the RBNZ. The central Bank put a lot of emphasis on the softer than expected GDP growth over the second half of 2016. This signaled delayed pick-up in inflation pressures and a slower return to full capacity. In essence the need for a cash rate hike is highly unlikely due to the long-term inflation outlook. Also take note of how they usually like to talk their currency down.

NzdJpy Daily Chart

Though price opened at a bear sell zone, between MPP and MM3, we saw some some kiwi strength mixed with Yen weakness during the month that resulted in the monthly bull target to be achieved at MR2. Price has been trading with an ascending channel since mid-April and now at the top of the channel(Resistance) where there is confluence between the 61.8 Fib level. This might probably be a bearish flag continuation pattern should we see it retrace all the way down and eventually break the bottom of the channel.

NzdJpy H4 Chart

Price failed to break a key level of resistance at WR1 which coincides with MR2 at 81.00 psych. It is currently at support, also with the 21 Moving Average holding as dynamic support though we have broken through the 80.500 psych and the trend line. Take note of the stochastic divergence as traders are most likely to play it out.

NzdJpy H1 Chart

Price has already reached the daily target just before London Open. We might probably get a fade that would help retrace price up to the 61.8 fib level where I will be looking to sell.

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