BNZ look To re-enter a strategic short position on NZD/USD. In a note to clients they report “NZD has bounced back admirably from cyclical lows hit after the RBNZ dropped its tightening bias. But the medium-term outlook is still negative, even with recent strong gains in dairy prices at auctions. We would consider rallies toward 0.76 as
opportunities to enter strategic short positions, targeting 0.70″.
They also note “we feel that levels above 0.7550 offer attractive risk-reward for a strategic NZD/USD short, on the premise that the mega-rally in the USD continues to grind higher. We would set a wide stop, 0.77 or higher, as is prudent in volatile markets such as these”.
Sell NZD/USD at 0.7550, stop >0.7700 with a profit target of 0.7000.
Capital Trust Markets reports “the Aussie dollar has shown a lot of resiliency against most major currencies recently, raising the case of more upside in pairs like AUDUSD and AUDJPY.
There are a couple of important trend line formed on the 4 hour chart of the AUDJPY pair, which are likely to act as a support for the pair moving ahead. The pair recently climbed towards 102.80 area where it found sellers, and is currently trading lower. There is a chance that the pair might spike lower towards the first bullish trend line, which is also sitting around the 23.6% Fibonacci retracement level of the last leg from the 98.05 low to 102.83 high. Moreover, there is one more bullish trend line, connecting lows sitting just below the first trend line. So, there is a lot of support around the 101.80-60 area where buyers are likely to take a stand. If the pair continues to trade higher from the current or lower levels, then initial hurdle is around the last swing high of 102.83, followed by the all-important 103.00 area.
On the other hand, if the AUDJPY pair breaks the highlighted support zone, then it is likely to head towards the 100 simple moving average (SMA) – 4H, which is around the 50% fib retracement level.
There is no major release in Australia in the coming sessions, but in Japan the BOJ monetary policy meeting minutes will be released during the next Asian session. We need to see how the Yen pairs react after the release. Overall, buying dips is a good idea in AUDJPY moving ahead”.
(Source: Capital Trust Markets)