USD/JPY
The US dollar fell rather precipitously during the trading session on Monday initially against the Japanese yen, reaching down below the ¥113 level. This is an area that has been resistance previously, so at this point I think that there are buyers willing to lift from there, as we have seen. This is a market that has been important on longer-term charts as well. At this point, I think that the market probably goes to the ¥114 level, perhaps even the ¥114.50 level. This was essentially a “risk off” type of move, which of course makes quite a bit of sense. I think at this point it makes sense that we have turned around to rally based upon the interest rate differential that of course will continue to favor the upside.
NZD/USD
The New Zealand dollar initially dropped a bit during the trading session on Monday but turned around to show signs of life again. The 0.65 level above will be resistance though, and I think that we will get a bit of a rally, only to be followed by selling. I think that any signs of exhaustion could be an opportunity to start shorting again as the New Zealand dollar has of course been wasted by the US/China trade meltdown, and of course any troubles with risk appetite overall. I think that we will continue to see both the New Zealand dollar and the Australian dollar fall, mainly because of that situation which is not getting any better. When I look at this chart, it is technically a move to the 0.63 handle just waiting to happen. If we break above the 0.65 handle, I think that the 0.66 level above will be even more resistive. I have no interest in buying this pair.
