- NZD is still the highest yield currency among all major 8 and 2017 has been a good year so far for the fundamental side of NZD; the GDP & inflation datas have all picked up well, the employment datas were soft but not exactly negative. The market even got ahead of itself weeks ago prior to RBNZ meeting to price in a rate hike. Although that did not happen and we saw large selling into NZD, but this does not eliminate the fact that NZD has been doing well fundamentally. Meanwhile, JPY is still on the path of QE and inflation is still low, the agenda for BOJ still remains to do whatever it takes to deprecate its currency. The fundamental bias is very clear in this pair and that’s why we want to buy it. Technically we have a nice Kangaroo tail at strong support area of 81.
- The catalyst was the fundamental bias in these 2 currencies.
- W’re in the oversold area support is strong.
- The risk is another jawboning comment by RBNZ or any global risk event to push JPY up.
- I’ll manage it fundamentally so unless the fundamental picture has changed, otherwise i’ll stay in.
- Yes because the fundamental bias is very strong for NZD & JPY
SL @ 79.90
P @ 83.20
****updated Feb 23rd 7pm****
There is no major catalyst for both currencies but the market is favouring for JPY due to the weakness of USD & EUR and generally uncertainty over the politics in both U.S and Europe.
Our order got filled today and we think the fundamental strength is still with NZD as BOJ still maintains their easing policy for now.
****updated Feb 24th 5pm****
NZD/JPY had a large bearish candle today to break down support of $81.
We’re still within the support zone and the movement was largely due to the safe heaven inflow into Japanese Yen, as our fundamental bias is still valid and we will hold trade for the upward movement.
The risk is the large swing that might whipsaw us out.
****updated March 2nd 7pm****
NZD/JPY is still in play with our range and as long as 80.50 can hold well, we think this trade should eventually go up as the fundamental strength and the carry trade effect will still benefit NZD/JPY.