The New Zealand dollar topped the performance charts against the greenback in overnight trade, advancing nearly 1% as a rally in commodities and stocks stoked demand for higher-yielding assets. The gains come on the heels of a steep sell-off yesterday that saw US equities plummet more than 1% across the board. The kiwi’s gains were triggered by a central bank report that showed executives had raised their inflation expectations, fueling speculation that the Reserve Bank of New Zealand will move on interest rates. The NZD/USD pair broke through interim resistance at the 0.7920 before leveling off just above the 0.80-handle. Interim support rests at the 0.7970 level, with subsequent floors eyed at 0.9720 and 0.7860. Topside targets are eyed at the 0.80-handle, backed by 0.8020 and 0.8060. With no data on the kiwi economic docket this week, price actions will be dictated by swings in risk appetite, with Monday’s loss’s keeping traders on edge.
Key Levels/Indicators
Level/Indicator | Level |
50-Day SMA | 0.7793 |
20-Day SMA | 0.7937 |
10-Day SMA | 0.7899 |
2011 High | 0.8120 |
The Japanese yen continued to slide overnight, breaching the 82-figure early in per-market trade. With risk appetite creeping back into markets, the allure of the safe-haven continues to slowly lose its luster. With the Japanese economy falling back into recession, the yen may continue to see pressure in the coming days if market appetite persists. The USD/JPY pair continues to trade within the ascending channel that dates back to May 5th. Topside targets are eyed at 82.20 backed by 82.40, with interim support resting at the 23.6% Fibonacci extension taken from the March 16th and May 5th troughs at 81.70. Subsequent floors are seen at 81.50 followed by 81.30. Traders will be eyeing trade balance figures overnight with consensus estimates calling for steep declines in domestic exports. A weaker than anticipated print here could see further losses for the battered yen.
Key Levels/Indicators
Level/Indicator | Level |
50-Day SMA | 81.97 |
20-Day SMA | 81.16 |
10-Day SMA | 81.40 |
2011 High | 85.51 |
Upcoming Events
Date | GMT | Importance | Release | Expected | Prior |
5/24 | 23:50 | MEDIUM | Adjusted Merchandise Trade Balance (Yen) (APR) | -695.9B | 96.3B |
5/24 | 23:50 | MEDIUM | Merchandise Trade Balance Total (Yen) (APR) | -703.7B | 196.5B |
5/24 | 23:50 | LOW | Merchandise Trade Exports (YoY) (APR) | -12.7 | -2.2 |
5/24 | 23:50 | LOW | Merchandise Trade Imports (YoY) (APR) | 12.8 | 11.9 |
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