InvestMate|NZD/JPY Kiwi rallies to break out
Updated
NZD/JPY Kiwi rallies to break out.
🇳🇿 The NZD has been in a downtrend with a number of currencies for some time, on the chart with the yen we can see the accumulation since March this year.
🇳🇿 Looking at the data coming out of the economy.
🇳🇿 Unemployment one of the lowest on record at 3.3%
🇳🇿 Inflation at 7.2% Not the worst.
We can see that it has been slowing down over the last few months.
🇳🇿 Interest rates 3.5% with projected increases to 4% during next decision.
🇳🇿 Consumer confidence index slowly rising currently at -42.7% not too bad but the market was expecting a better result.
🇳🇿 As we can see the economic situation in New Zealand is not the worst. It definitely has the potential to perform well in the coming months.
💴In Japan, no change.
💴Unemployment Rate low at 2.5%
💴Inflation low 3%. Japan is one of those countries that has not been hit by Inflation as much as Europe and the USA.
💴Interest rates at -0.1%. Still negative from 2016. Hence these falls in the Yen. When other countries raise rates causing their currencies to strengthen, their strength against the Yen increase.
💴For now, there are no increases on the horizon. The Bank of Japan says it has no intention of changing its monetary policy.
💴But the government doesn't want the Japanese Yen so cheap either, hence in recent days we have seen sharp falls which were interventions to stop the Yen weakening sharply against other currencies.
💴I don't think this will stop investors from pushing prices up again.
💴 Looking at the situation of both currencies, I don't think anything has changed in the current up trend over the months. The only threat could be unexpected monetary interventions to strengthen the Yen.
Turning to the chart.
📈 Since 11 October, we have started again to attempt to break through the strong resistance line we are currently at. The move down to the 81 levels looked like a final attempt to see how much the Yen could be strengthened but on a reversal on the kiwi we recorded a double bottom followed by a sharp breakout.
📈 Moving to the 1H chart we see a slight jerking of the price in recent days which was caused by monetary interventions on the Japanese yen.
📈 As you can see this has not been very impressive when compared to the New Zealand dollar.
📈Transforming to the monthly chart and measuring the two largest downward waves using the fibo grid, we can see why the price just had so much trouble breaking through the 0.786 zone. We are on a cluster of two 0.786 fibo levels.
📈Using statistics, the more attempts to attack a level, the greater the attempt to break it out.
📈 The final test of strength will come at the 93.4 levels where the strongest resistance line in the history of this currency pair is located.
📈 Given that we are still in an uptrend I would be tempted to play for a breakout of the nearest resistance line, which we have been fighting since March this year.
📈 The situation could look like on the posted chart with one more attempt to test this resistance line this time from the top. Setting a stop below the current weekly candle and targeting the biggest resistance on the pair at the level of 93 gives us an excellent profit/risk ratio of 5.1
🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
🇳🇿 The NZD has been in a downtrend with a number of currencies for some time, on the chart with the yen we can see the accumulation since March this year.
🇳🇿 Looking at the data coming out of the economy.
🇳🇿 Unemployment one of the lowest on record at 3.3%
🇳🇿 Inflation at 7.2% Not the worst.
We can see that it has been slowing down over the last few months.
🇳🇿 Interest rates 3.5% with projected increases to 4% during next decision.
🇳🇿 Consumer confidence index slowly rising currently at -42.7% not too bad but the market was expecting a better result.
🇳🇿 As we can see the economic situation in New Zealand is not the worst. It definitely has the potential to perform well in the coming months.
💴In Japan, no change.
💴Unemployment Rate low at 2.5%
💴Inflation low 3%. Japan is one of those countries that has not been hit by Inflation as much as Europe and the USA.
💴Interest rates at -0.1%. Still negative from 2016. Hence these falls in the Yen. When other countries raise rates causing their currencies to strengthen, their strength against the Yen increase.
💴For now, there are no increases on the horizon. The Bank of Japan says it has no intention of changing its monetary policy.
💴But the government doesn't want the Japanese Yen so cheap either, hence in recent days we have seen sharp falls which were interventions to stop the Yen weakening sharply against other currencies.
💴I don't think this will stop investors from pushing prices up again.
💴 Looking at the situation of both currencies, I don't think anything has changed in the current up trend over the months. The only threat could be unexpected monetary interventions to strengthen the Yen.
Turning to the chart.
📈 Since 11 October, we have started again to attempt to break through the strong resistance line we are currently at. The move down to the 81 levels looked like a final attempt to see how much the Yen could be strengthened but on a reversal on the kiwi we recorded a double bottom followed by a sharp breakout.
📈 Moving to the 1H chart we see a slight jerking of the price in recent days which was caused by monetary interventions on the Japanese yen.
📈 As you can see this has not been very impressive when compared to the New Zealand dollar.
📈Transforming to the monthly chart and measuring the two largest downward waves using the fibo grid, we can see why the price just had so much trouble breaking through the 0.786 zone. We are on a cluster of two 0.786 fibo levels.
📈Using statistics, the more attempts to attack a level, the greater the attempt to break it out.
📈 The final test of strength will come at the 93.4 levels where the strongest resistance line in the history of this currency pair is located.
📈 Given that we are still in an uptrend I would be tempted to play for a breakout of the nearest resistance line, which we have been fighting since March this year.
📈 The situation could look like on the posted chart with one more attempt to test this resistance line this time from the top. Setting a stop below the current weekly candle and targeting the biggest resistance on the pair at the level of 93 gives us an excellent profit/risk ratio of 5.1
🚀If you appreciate my work and effort put into this post I encourage you to leave a like and give a follow on my profile.🚀
Note
Position still in play
🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫
💲 To keep up to date with all my activities I invite you to visit my Telegram 💲
💲 t.me/Investmatez 💲
🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫
💲 To keep up to date with all my activities I invite you to visit my Telegram 💲
💲 t.me/Investmatez 💲
🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫🎫
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.