The New Zealand dollar rose to a fresh yearly high of 65.94 against the Japanese yen as market participants continued to fuel their appetite for risk, and the NZD/JPY may continue to retrace the sell-off from the previous year as market sentiment improves.
Currency Pair: NZD/JPY
Chart: 60 Min Charts
Short-Term Bias: Flat
Analysis
The New Zealand dollar rose to a fresh yearly high of 65.94 against the Japanese yen as market participants continued to fuel their appetite for risk, and the NZD/JPY may continue to retrace the sell-off from the previous year as market sentiment improves. After reaching a high of 74.59 on 9/8, the kiwi-yen slipped to a low of 44.23 in February as traders curbed their temperament for higher risk/reward investments however, the rebound in global equities paired with higher commodity prices have raised demands for carry trades, and the pair may continue to push higher over the near-term as investors speculate the Reserve Bank of New Zealand to tighten monetary policy over the next 12 months. At the same time, the NZD/JPY may face increased selling pressures over the next few hours of trading as investors weigh the outlook for a global economy, and the pullback in the equities market could lead the pair to test 62.90-63.00 (61.8% Fib) for short-term support. Nevertheless, as the RSI holds in oversold territory, we are likely to see a corrective retracement follow later in the week, and we should see the kiwi-yen cover the gap from the 120 SMA at 64.62. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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