NZD/JPY in focus ahead of New Zealand GDP
Fawad Razaqzada September 14, 2016 11:13 PM
<p>The New Zealand dollar has shown relative strength again today and the commodity currency could push further higher unless the country’s GDP comes out below […]</p>
The New Zealand dollar has shown relative strength again today and the commodity currency could push further higher unless the country’s GDP comes out below expectations this evening (or Thursday morning NZ time). The New Zealand economy is expected to have expanded by a solid 1.1% in the second quarter compared to 0.7% in the first. Judging by the NZD’s strength, the market may be positioning itself up for a positive surprise. However, this also means that there is now scope for disappointment and if the data comes out weaker than expected then there is a possibility for a sharp drop as speculators potentially rush to exit their positions.
So, there may be clear trading opportunities for either the bulls or the bears on the New Zealand dollar depending on the outcome of the data and the market’s response. Among the NZD pairs, the NZD/JPY may be an interesting one to watch around the time the data comes out. If the data or otherwise helps to lift the NZD/JPY above the bearish trend line at 75.05 area then there is a possibility for a quick 100 pip pop to the next resistance and recent high at 76.05 before the unit makes its next move. However, if the NZD/JPY breaks decisively below support at 74.30 (old resistance) then price may drop to test its 61.8% Fibonacci retracement level against the most recent upswing at 73.70. The next potential support below this level is at 72.40, where the selling pressure has stalled several times in the past.
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