- BOJ Policy Meeting
- Strengthened NZ Dollar Concern
- New Zeeland Economic Recovery
The Japanese Yen weakened Monday morning against the U.S dollar, resulting in the USD/JPY pair crawling back to the 107.00 handle. New Zealand dollar rally against the Dollar also came to a halt as the NZD weakened, resulting in the NZD/USD pair edging lower.
The USD/JPY pair retook the 107 handle after dropping to its lowest level in more than two weeks. The pair remains range-bound with a trading activity limited to the 106.6 and 107.5 level.
Time : 07-13-2020
Pivot : 106.88
Technical View : Long Above 107.08
Targets : 107.14 – 107.28
Comments : Weak Bullish to Neutral
Last Price : 107.07
Technical View : Short below 106.68
Target : 106.59 – 106.48
The Japanese Yen weakened as traders await a key policy meeting report from the Bank of Japan on Wednesday. The Central bank is poised to post a quarterly outlook for an economy that has posted two consecutive quarters of contraction.
Ahead of the policy meeting, the BOJ has confirmed the appointment of Seiichi Shimizu as the head of the markets department overseeing monetary policy drafting. He is tasked with the responsibility of drafting policies that will help cush the economy amid the COVID-19 pandemic.
Likewise, the USD/JPY remains susceptible to developments in the U.S in response to COVID-19. The Dollar is likely to strengthen and send the pair higher should the second wave result in massive lockdowns in some states experiencing record numbers of infections.
The New Zeeland dollar, one of the best-performing currencies against the Dollar the past week, came under pressure Monday Morning.
NZ Dollar Resiliency
However, the NZD remains resilient against the Dollar, having strengthened to five-month highs. A spike to five-month highs comes at the backdrop of growing optimism about NZ economy recovery, the country having successfully combatted the havoc causing a pandemic.
Time : 07-13-2020
Pivot : 0.6571
Technical View : Long Above 0.6591
Target : 0.6601 – 0.6611 – 0.6633
Comments : Weak Bearish To Neutral
Last Price : 0.6554
Technical View : Short below 0.6551
Target : 0.6547 – 0.6541 – 0.6531 – 0.6503
Economic releases have improved significantly with the opening of the economy with June food prices increasing 0.5% against a 0.8% drop in May. However, a higher exchange rate for the New Zeeland dollar against the Dollar could pose a significant danger to the country’s export business.
The Reserve Bank of New Zeeland has already raised concerns over the impact of a strengthened NZ dollar. The dovish comments are one of the tailwinds that could curtail upward movements in the NZD/USD pair.