Fundamental and Technical Outlook: NZD/JPY

Fundamental Outlook: NZD/JPY

During the Asia-Pacific session reports of nuclear tests by North Korea along with comments from BoJ Governor Kuroda that no special instructions were received from PM Abe and that they did not discuss foreign bond purchases, has saw JPY supported with USDJPY declining to once again test 102.00

There is no tier 1 data due in today's London session.

In today’s session we expect the strongest currency to be JPY as safe haven flows along with diminishing expectations for BoJ easing this month should keep JPY supported.

The weakest currency is expected to be NZD which has continued to pull off its best levels in recent sessions. Given many NZD pairs have recently been at yearly highs there is a strong risk of greater retracements.

The NZDJPY pair is currently priced at 75.55.

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

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

75.72, 75.95

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

75.00

Technical Outlook: NZD/JPY (Daily Time Frame)



Market Opening Wrap

In Asian Equity Markets stocks extended losses on Friday following reports North Korea had conducted a nuclear test, while global stocks and bonds slid on uncertainty over the prospect of further easing from the ECB after it left policy unchanged. MSCI's broadest index of Asia-Pacific stocks outside Japan fell 0.6 percent after touching a 13-month high on Thursday. Japan's Nikkei erased gains to trade 0.2 percent lower after seismic activity triggered by the suspected North Korean nuclear test. South Korea's KOSPI also extended losses on the suspected activity. After opening 0.7 percent lower, it was last trading down 1.3 percent from Thursday's close. China's CSI 300 index as 0.1 percent lower, and the Shanghai Composite was little changed.

In Currency Markets the dollar fell against the yen on Friday and was on track for weekly losses in a week marked by continuing uncertainty about when U.S. interest rates will rise. The dollar fell 0.4 percent to 102.12 yen, pulling away from Thursday's high of 102.60 yen. The euro edged up 0.2 percent to $1.1280, holding firm after the ECB left interest rates unchanged on Thursday. The Australian dollar traded at $0.7649, up 0.08 percent. The dollar index eased 0.12 percent to 94.93. The ECB kept the door open to more stimulus but gave no explicit hints about its next move, and ECB head Mario Draghi said that further expanding its asset-purchase program had not even come up for discussion.

In Commodities Markets oil prices pulled back on profit-taking on Friday after settling more than 4 percent higher a day earlier after government data confirmed a surprisingly huge drawdown in U.S. crude inventories. London Brent crude for November delivery was down 36 cents at $49.63 a barrel. NYMEX crude for October delivery was down 35 cents at $47.27, after settling up 4.7 percent, on Thursday. Spot gold was up 0.1 percent at $1,339.06 an ounce and spot silver was nearly flat at $19.60 per ounce. Platinum rose 0.5 percent to $1,087.50 an ounce. Platinum was on track for first weekly gain in six. Palladium rose over 1 percent to $689.24 and was on track for its first weekly gain in three.

In US Equity Markets stocks fell on Thursday, pulled lower by Apple after its latest iPhone failed to impress Wall Street, but gains in energy shares limited the decline. The S&P 500 lost 0.22 percent, to 2,181.3 and the Nasdaq Composite fell 0.46 percent, to 5,259.48. The Nasdaq broke a four-day streak of gains, led by declines in Apple. The stock fell 2.6 percent in its biggest daily percentage decline since June 24. The S&P 500 information technology index fell 0.9 percent and led sector losses Hewlett-Packard Enterprise  shares fell 3.2 percent after it agreed to sell its software business to Micro Focus in a $8.8 billion deal. Shares of SuperValu fell 9.5 percent after it gave a disappointing outlook, a day after Sprouts Farmers Market warned on its profit.

In Bond Markets U.S. Treasury yields rose across the board on Thursday, in line with European bonds, after European Central Bank President Mario Draghi left the door open for additional monetary policy easing but gave no indication that more stimulus was actually coming. Benchmark 10-year Treasury notes were down 20/32 in price to yield 1.609 percent, from 1.539 percent late on Wednesday. The 30-year Treasury bond fell more than a point in price to yield 2.314 percent, from 2.236 percent on Wednesday.

Source: Institute of Trading and Portfolio Management