Kiwi King of Currencies NZDJPY NZDUSD GBPNZD
Kiwi, King of Currencies: NZD/JPY, NZD/USD, GBP/NZD
Last week, the Reserve Bank of New Zealand (RBNZ) left rates unchanged, left their bond buying program unchanged, and introduced a new loan facility…all as expected. In addition, Central Bank Governor Orr signaled they were not considering negative interest rates. That news, combined with only a small cluster of coronavirus cases in the country in Auckland, has the New Zealand Dollar on a tear higher and hasn’t looked back.
NZD/JPY
After putting in series of higher lows, NZD/JPY jumped above prior resistance and hit levels not seen since January, near 72.79. After doing so, the pair pulled back to the breakout level at 71.00 and consolidated as the RSI moved back into neutral territory on a daily timeframe.
Source: Tradingview, City Index
On the 240-minute timeframe, NZD/JPY is consolidating in a pennant like formation. The target for the breakout of a pennant is the length of the flagpole added to the breakout point of the pennant, which would target near 75.00. However, watch for horizontal resistance dating back to April 2019 near 74.75.
Source: Tradingview, City Index
NZD/USD
Much of the same can be said for NZD/USD. After putting in a series of higher lows inside a channel, the pair broke out above previous highs just below .6800. The pair only pulled back slightly as the RSI moved from overbought conditions back to neutral on a daily timeframe. However, with NZD/USD continuing to push higher, the RSI has moved back above 70 into overbought conditions.
Source: Tradingview, City Index
The pair had been in a channel since early July. The target for the breakout of a channel is the height of the channel added to the breakout point, which in this case is near .7050. However, the pair first will have to get through horizontal resistance from highs of early December 2018 near .6969 and the psychological resistance level of .7000. Bulls will be looking to buy any pullbacks. Support isn’t until breakout level back near .6800.
GBP/NZD
GBP/NZD may present the best opportunity for Kiwi bulls. On a daily timeframe the pair has been moving lower since April. However, with Brexit uncertainty, the pair hasn’t broken lower below support. GBP/NZD bears (bullish New Zealand dollar) will be closely watching a break below the rising trendline near 1.9095 for opportunities to add to short positions. However, trading this pair also bring Brexit headline risk along with it.
Source: Tradingview, City Index
There are many targets one can make for a breakdown of GBP/NZD (including near 1.8100 on a daily timeframe!). However, on a 240-minute timeframe, a break below 1.9095 would target the preceding low near 1.9053. Below there would target the July lows near 1.9000 and then the 127.2% Fibonacci extension level from the September 18th lows to the October 22nd highs near 1.8840.
Source: Tradingview, City Index
There are plenty of opportunities to get long for traders who are bullish the Kiwi. Traders need to make sure to use proper risk/reward for each trade.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024