Forex Forecast: USD/JPY, NZD/USD

USD/JPY fails several times to jump above 145.00

(Melina Deltas, CFTe – XM)

USDJPY is struggling to surpass the 145.00 psychological mark and have a closing day above it, switching the short-term picture from bullish to neutral.

The technical oscillators are suggesting a bearish move as the stochastic is moving towards the oversold zone, while the MACD is standing beneath its trigger line. The 20-day simple moving average (SMA) is acting as a strong support level and any bearish movements may push the market towards the long-term ascending trend line.

More declines may challenge the 50-day SMA near the 139.35 barrier and a break beneath these lines could open the way for the 137.40 and 135.55 barrier, changing the outlook to negative.

On the other hand, a successful climb above the 145.00 round number could add to the optimism for a retest of the previous peak of 145.90, which is a 24-year high. If buying interest intensifies then the pair may move towards the 146.83-147.70 restrictive zone.

All in all, USDJPY has been in a consolidation area since September 7; however, the broader outlook remains strongly bullish.

NZD/USD gathers bullish traction

(Melina Deltas, CFTe – XM)

NZDUSD finally jumped above the weekly resistance of 0.5730 to top at 0.5800 in the wake of the RBNZ’s hawkish policy announcement early on Wednesday.

Although the pair has already reversed its advance, the RSI continues to build its uptrend above its 30 oversold level, signaling that the previous bearish wave in the price has probably bottomed out. Likewise, the MACD is extending its positive momentum above its red signal line, mirroring an improving short-term bias as well.

On the way up, the recovery may initially face some challenges between the 20-day simple moving average (SMA) at 0.5855 and the tentative descending trendline currently seen around 0.5900. If the bulls forcefully pierce through this area, the next obstacle could be found between 0.6000 and the 50-day SMA at 0.6078.

Should the bears retake control, pressing the price quickly below 0.5730, all eyes will turn again to the 0.5563 low. A durable extension beneath that bar would bring the pandemic 2020 trough of 0.5468 and the nearby constraining zone of 0.5415 back under the spotlight.

In brief, buying appetite may keep improving in NZDUSD in the short term once the price successfully overcomes the 0.5725 bar.

NZD has responded to RBNZ’s hawkishness

(Alexander Kuptsikevich – FxPro Financial Services Limited)

Unlike the RBA yesterday, the Reserve Bank of New Zealand met expectations by raising its key rate by 50 points to 3.5%. Having started raising the rate a year ago, the RBNZ accelerated the move from 25 to 50 points in April, bringing it to the cyclical highs of 2014-15.

The Reserve Bank cites too high core inflation (without food and energy) and labour shortages as reasons for further rate hikes. And here, it is worth remembering that at its peak in 2007/08, New Zealand’s key rate reached 8.25%, and cyclical lows in 2002 and 2003 were 4.75% and 5.00%, respectively. In other words, the New Zealand economy is more suited to high rates than many.

The NZDUSD is gaining 2.6% so far this week and feels quite comfortable since the beginning of the day, in contrast to the pullback in the dollars on Wednesday morning. On the daily charts, the two September lows formed a double bottom. From roughly the same levels, we saw an intensification of buying in the Kiwi in March 2020.

That said, the NZDUSD position remains quite fragile, and the initial bounce in the pair could quickly stall if the bears remain the dominant force in the world markets. Cautious traders to confirm a change of trend from bearish to bullish should wait for the pair to strengthen from the current 0.5740 to levels above 0.6000, where the 50-day average and the former support are concentrated beside the beautiful round level.

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