NZDJPY: Refusing to Look Down

NZDJPY continues to break to new highs at an increasingly bullish rate. With both technicals and fundamentals favouring further upside this is not a trend I would look to fight.

thinkforex nzdjpy

NZDJPY Trading Account?

At the current rate of acceleration, NZDJPY could be testing the 2006 highs within 3 weeks.

The pair has appreciated 9.4% since the beginning of October when Global Dairy prices saw a surprise upside result of 1.4%. Whilst not a high number it was enough to shake off the Kiwi bears who were getting used to Dairy Prices contracting by 10% every 2 weeks.

Japan is now officially in recession after seeing GDP contract for a 2nd consecutive quarter and money continues to flow out of the Yen after the BoJ announced an increase its asset purchases. All of these factors combined explain why we are seeing NZDJPY appreciate at break-neck speed and likely to continue into the foreseeable future.

After positive Retail Sales for New Zealand and soft GDP data for Japan today, traders will now shift their focus to Global Dairy Prices on Wednesday. Any upside surprises here will be bullish for the Kiwi Dollar, which has only seen 4 positive auctions this year and all below 1.5%. So a strong gain of 2% should see NZDUSD eye up the 80c level and catapult NZDJPY towards 0.930-35.

Technically the pair continues to favour ‘buy the dip’ traders, with any retracements towards 92.00 likely to attract further bullish attention. The pair gapped up over the weekend, and gaps which appear during such a strong trend have a tendency to not get filled, making it an ideal place to enter with buy-limit orders with a stop below.

thinkforex nzdjpy_1

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