09-26-2019, 09:17 AM
Technical Overview of NZD/USD and USD/JPY Currency Pair
NZD USD
NZD traded lower against USD and closed at 0.6271.
· NZD/USD rebounding after staging key reversal lower yesterday
· Pair is up close to 0.59% from the NY close and nearing 0.6300
· Move up coincided with speech by RBNZ Governor Orr
· Orr says rates will remain low for long time, but QE unlikely
· Adds that low rates provides excellent investment opportunities
· Resistance at 10-day MA at 0.6314 and break eases downward pressure Bank of America Merrill
Gross Domestic Product q/q (GDP) is a monetary valuation of all goods and services produced in the United States in the given quarter compared with the previous one minus the price of goods and services used in production.
The GDP calculation equation includes consumer spending, government spending, amount of all investments (including capital expenditures for activities) and total net export of the country.
GDP is the indicator of the country's economy and population living standards. A regular inflation adjustment allows for a valid comparison of the current value with the previous one. Thus, the country's GDP can be displayed as a percentage of the previous year or quarter. This is handy for measuring the economic growth rate.
GDP growth can have a positive effect on dollar quotes.
According to the Analysis, pair is expected to find support at 0.6264 and a fall through could take it to the next support level of 0.6245. The pair is expected to find its first resistance at 0.6328 and a rise through could take it to the next resistance level of 0.6347.
USD JPY
USD traded lower against JPY and closed at 107.76.
Bank of America Merrill Lynch Global Research discusses USD/JPY outlook and maintains a structural bearish bias
The bar is high for the BoJ to cut the policy rate and the USD/JPY level is likely to be a key variable. We would sell USD/JPY (and vol) if it rallies on expectations for the BoJ from the current level.
The likelihood of the BoJ's rate cut would increase if USD/JPY sells off to 104-105, accompanying weakness in risk assets. However, we do not think a mere 10bp rate cut would contain the pressure. We expect the market to test the BoJ in such a scenario and volatility will rise," BofAML notes.
"But the combination of fiscal easing, rate cut with supplementary measures, and more purchases of foreign assets by public/semi-public institutions, may prove effective in weakening JPY," BofAML adds.
BOJ Governor Speech is an event having the greatest impact on JPY among all public statements made by the Japanese regulator. The Governor's rhetoric reflects the official position of the Bank of Japan.
If some hints at tightening the monetary policy by the Bank of Japan are detected in the Governor speech, it may affect JPY positively.
According to the Analysis, pair is expected to find support at 107.20 and a fall through could take it to the next support level of 106.99. The pair is expected to find its first resistance at 107.86, and a rise through could take it to the next resistance level of 108.07.
Important Economic Events of the Day
· JPY: BoJ Governor Kuroda Speech
· USD: United States Gross Domestic Product (GDP) q/q
· EUR: ECB President Draghi Speech
· GBP: BoE Governor Carney Speech
· USD: Pending Home Sales m/m
· MXN: Bank of Mexico Interest Rate Decision
For More information about the release time of news and its impact visit Economic Calendar Page!
NZD USD
NZD traded lower against USD and closed at 0.6271.
· NZD/USD rebounding after staging key reversal lower yesterday
· Pair is up close to 0.59% from the NY close and nearing 0.6300
· Move up coincided with speech by RBNZ Governor Orr
· Orr says rates will remain low for long time, but QE unlikely
· Adds that low rates provides excellent investment opportunities
· Resistance at 10-day MA at 0.6314 and break eases downward pressure Bank of America Merrill
Gross Domestic Product q/q (GDP) is a monetary valuation of all goods and services produced in the United States in the given quarter compared with the previous one minus the price of goods and services used in production.
The GDP calculation equation includes consumer spending, government spending, amount of all investments (including capital expenditures for activities) and total net export of the country.
GDP is the indicator of the country's economy and population living standards. A regular inflation adjustment allows for a valid comparison of the current value with the previous one. Thus, the country's GDP can be displayed as a percentage of the previous year or quarter. This is handy for measuring the economic growth rate.
GDP growth can have a positive effect on dollar quotes.
According to the Analysis, pair is expected to find support at 0.6264 and a fall through could take it to the next support level of 0.6245. The pair is expected to find its first resistance at 0.6328 and a rise through could take it to the next resistance level of 0.6347.
USD JPY
USD traded lower against JPY and closed at 107.76.
Bank of America Merrill Lynch Global Research discusses USD/JPY outlook and maintains a structural bearish bias
The bar is high for the BoJ to cut the policy rate and the USD/JPY level is likely to be a key variable. We would sell USD/JPY (and vol) if it rallies on expectations for the BoJ from the current level.
The likelihood of the BoJ's rate cut would increase if USD/JPY sells off to 104-105, accompanying weakness in risk assets. However, we do not think a mere 10bp rate cut would contain the pressure. We expect the market to test the BoJ in such a scenario and volatility will rise," BofAML notes.
"But the combination of fiscal easing, rate cut with supplementary measures, and more purchases of foreign assets by public/semi-public institutions, may prove effective in weakening JPY," BofAML adds.
BOJ Governor Speech is an event having the greatest impact on JPY among all public statements made by the Japanese regulator. The Governor's rhetoric reflects the official position of the Bank of Japan.
If some hints at tightening the monetary policy by the Bank of Japan are detected in the Governor speech, it may affect JPY positively.
According to the Analysis, pair is expected to find support at 107.20 and a fall through could take it to the next support level of 106.99. The pair is expected to find its first resistance at 107.86, and a rise through could take it to the next resistance level of 108.07.
Important Economic Events of the Day
· JPY: BoJ Governor Kuroda Speech
· USD: United States Gross Domestic Product (GDP) q/q
· EUR: ECB President Draghi Speech
· GBP: BoE Governor Carney Speech
· USD: Pending Home Sales m/m
· MXN: Bank of Mexico Interest Rate Decision
For More information about the release time of news and its impact visit Economic Calendar Page!