Fundamental and Technical Outlook: NZD/JPY

Fundamental Outlook: NZD/JPY

During the Asia-Pacific session the main event was the latest RBA Monetary Policy Decision which saw the RBA remain on hold as widely expected stating that "recent data suggest that overall growth continues despite a fall in business investment" however "inflation still quite low and is expected to remain low for quite some time". We also saw comments from PM Abe adviser Hamada who argued the BoJ should remain on hold until after the Fed's September decision. This initially saw JPY supported however has since pared most of these gains with JPY counterparts once again gaining ground.

Coming up in today's London session the main event will be Eurozone GDP.

In today’s session we expect the strongest currency to be NZD as continued positive risk sentiment has saw NZD remain relatively well supported.

The weakest currency is expected to be JPY as despite Hamada's earlier comments JPY has remained pressured amidst continued positive risk sentiment.

The NZDJPY pair is currently priced at 75.92.

There are several levels including the current price level which can be considered for buying opportunities:

The price levels below could be used to buy from as price retraces into them:

75.42, 75.00, 74.67

The price level below could be used to buy from as price breaks out above:

76.10

Source: Jarratt Davis

Technical Outlook: NZD/JPY



Market Opening Wrap

In Asian Equity Markets stocks edged up on Tuesday as investors awaited the Reserve Bank of Australia's policy meeting in which it is expected to keep interest rates steady. MSCI's broadest index of Asia-Pacific stocks outside Japan was up 0.3 percent. The Nikkei opened flat but was up 0.2 percent at 17,073.84 points by midmorning. The broader Topix gained 0.5 percent to 1,351.04 and the JPX-Nikkei Index 400 advanced 0.5 percent to 12,151.00. Mizuho Financial Group rose 1.0 percent, Sumitomo Mitsui Financial Group gained 2.0 percent and Dai-ichi Insurance Co added 2.7 percent.  The Shanghai Composite Index gained a slight 0.02 percent. The Australian index, S&P/ASX 200, fell 0.23 percent.

In Currency Markets the yen kept some distance from a one-month low against the dollar on Tuesday after Bank of Japan Governor Haruhiko Kuroda held back from signaling further easing, acknowledging instead the costs of the BOJ's aggressive stimulus. The Australian dollar gained 0.5 percent after news Australia's current deficit was smaller than expected in April-June, ahead of the policy announcement from the Reserve Bank of Australia later in the day. The U.S. dollar is stabilizing for now at around 103.45 yen. The common currency was little moved against the dollar, staying at $1.1147. The British pound maintained its firm tone, trading at $1.3305 in Asia after having hit a seven-week high of $1.3376 on Monday.

In Commodities Markets crude prices extended gains on Tuesday, buoyed after top producers Russia and Saudi Arabia agreed to cooperate on stabilizing the oil market, but a lack of immediate action to rein in output capped gains. London Brent crude for November delivery was up 12 cents at $47.75 a barrel, after settling up 80 cents on Monday. NYMEX crude for October delivery did not settle on Monday due to U.S. Labor Day holiday. It was trading roughly 20 cents higher from late Monday, up 87 cents at $45.31 a barrel.  Spot gold was slightly up at $1,327.46 per ounce. Spot silver touched an over 2-week high of $19.57 an ounce. Platinum was up 0.2 percent at $1,071.20 an ounce. Palladium rose 0.6 percent to $682.20.

In U.S., Equity Markets were closed for a Labour Day public holiday. 

In Bond Markets Japanese government bonds rose off earlier lows on Tuesday after the results of a 30-year JGB auction showed solid demand for longer maturities. The 30-year JGB outperformed, its yield falling 1.5 basis points to 0.505 percent after rising as high as 0.535 percent. The benchmark 10-year yield rose 1.5 basis points to minus 0.010 percent, while September 10-year futures were down 0.09 point at 151.09 in afternoon trading.

Source: Institute of Trading and Portfolio Mangement