On the 20th of August, the NZD/JPY was trading near the 74.500 level, which was a value it had not seen a sustained amount of price action since early February of this year. However, in less than two weeks, the NZD/USD has reversed off these lows and produced a rather strong bullish surge. As of this morning, the Forex pair is traversing within sight of the 78.000 juncture. The last time the NZD/JPY traded above this value in a sustainable fashion was in early July.
On May the 27th, the NZD/USD was actually trading at a greater value. A high of nearly 80.200 was exhibited on this date, but a rather choppy and incremental bear cycle was firmly established until the recent lows on the 20th of August were produced. The ability of the NZD/JPY to suddenly shift higher shows that risk appetite in global markets is improving, and financial institutions may be anticipating greater demand from commodity-rich nations like New Zealand.
Technically, the NZD/JPY is certainly correlating well within global Forex as the JPY has proven weaker in the short term. If current resistance levels near 78.000 can be proven vulnerable, this could certainly raise the potential for an increased amount of speculative trading by market participants who could anticipate higher values to be tested near term.
Speculators who believe the buying of the NZD/JPY has been overdone and want to challenge the recent trend that has been established should make sure they are using proper stop loss ratios. If the 78.000 is not able to see sustained trading, bearish traders may believe the 77.850 is a proper target for quick-hitting selling positions. Limit orders should be used for trades to make sure price fills do not provide too much of a surprise.
The NZD/USD has provided a definite amount of bullish tendency the past week, and traders may feel the pair will see less price velocity near term. However, timing market conditions is always difficult. While natural reversals lower may be seen, they may also prove to be an opportunity to buy the NZD/JPY and look for additional moves upwards as the current price ratios challenge important resistance which, if broken, may see additional fast trading take place.
NZD/JPY Short-Term Outlook
Current Resistance: 78.000
Current Support: 77.850
High Target: 78.210
Low Target: 77.650
