NZD/JPY: Kiwi bulls in command after RBNZ
|- NZD/JPY jumped to 75.80 heading towards European session on Wednesday.
- The pair benefited from the RBNZ’s refrain to provide any fresh dovish signals and recent improvement in global risk sentiments.
- 75.90 and 76.30 seem immediate resistances for the pair with 75.00 and 74.45 likely being nearby supports.
The NZD/JPY pair rallied more than 150 pips to 75.80 after the RBNZ decision on early Wednesday. The Reserve Bank of New Zealand (RBNZ) pleased Kiwi bulls as it refrained to offer any fresh dovish signals either for future monetary policy change or headline economic indicators. Adding to this, RBNZ Governor Adrian Orr’s comments signaling a downplay for the rate cut provided extra strength to the New Zealand Dollar, also known as Kiwi.
NZD/JPY surged to a week’s high around 75.80 heading towards European session as the RBNZ disappointed overall market consensus of a dovish statement together with no rate change. Even if the RBNZ followed no rate change forecast, it failed to provide any new signals that can indicate either policy change or the economic weakness. On the contrary, the central bank praised employment scenario.
Governor Adrian Orr also backed the central bank’s outlook and talked down chances of a rate-cut in near future when asked at a press conference following interest rate announcement.
With this, Kiwi Bulls assume greater strength and cried for buying the New Zealand Dollar.
On the contrary, recent improvements in the risk sentiment also weakens the JPY’s safe-haven demand. Notable among them was yesterday’s comments from the US President Donald Trump favoring absence of another government shutdown and a trade deal with China.
Given the upbeat market response from the RBNZ result, investors will now look forward to global risk events like US-China trade deal, US government shutdown and Brexit to get fresh impulse of trading.
NZD/JPY Technical Analysis
The pair needs to surpass early-month high around 75.90 in order to aim for 76.30 and the 76.80 resistance levels. During the pair’s extended rise past-76.80, buyers can aim for 77.30.
If at all the pair fall short of providing a daily close beyond 75.90, chances of its pullback to 75.00 and 74.45 can’t be denied.
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