GBP/JPY Leading the Way?September 25, 2018
Swiss franc looking for support against yenOctober 4, 2018
New Zealand dollar finding support on Monday
The New Zealand dollar has found a bit of support at the 0.66 level on Monday as traders returned from the weekend. This coincide quite nicely with the 50% Fibonacci retracement level, and it is of course a large, round, psychologically important figure. Beyond that, I think this has more to do with the US dollar than the New Zealand dollar itself, as the Americans and the Canadians have signed a trade agreement finally. At this point, I think you’re starting to see a bit of a relief rally for a lot of commodity currencies, and it’s a bit of a “on effect” from the Canadian dollar rallying as a commodity currency.
I do think we will see a short-term pop, but I’m not looking for an explosive move to the upside. Quite frankly, I’d be surprised if we break above the 0.67 level in the short term. While not as sensitive to the Sino-American relations, New Zealand does have a lot of exposure to China, so as long as that’s an issue overall when it comes to trade war disputes, this pair will be a bit sluggish. However, that’s not to say that you can’t do a quick “smash and grab” trade.
The alternate scenario of course is that we break down significantly below the 0.66 handle, and if we do I think we probably go looking towards the 0.65 level at that point.