NZ Dollar Buying Strategy! Solid Economy, Oceania Currencies ~ NZ Dollar Buying Strategy on November 1 ~

◎Strategy and Holding Positions

NZD Bullish View

Holding a Long NZD/JPY position

NZD/JPY”75.00” and ”75.50” to watch!Timing for new or additional position entries

↓↓↓ Please see below for the strategy when taking a new position ↓↓↓

NZD Buy Strategy! Double Bottom and Inverse Head & Shoulders ~NZD Buy Strategy on October 31~

◎NZD Outlook

NZ (New Zealand) had strong inflation data, resulting in strong expectations for rate hikes (currency). However, the NZ government faced uncertainty after last year’s regime change, though the current government has settled down recently.

Another concern is the Australian economy. Since NZ’s economy is closely linked with Australia’s, concerns about Australia translate into NZ concerns.

Currently, the Australian economy has been susceptible to China’s influence, and there were concerns about the US-China trade war. However, this week’s Australian data and China data appear to be stabilizing.

With these concerns settled and priced in, I think NZD may be less likely to rebound sharply from its lows.

NZD/JPY Daily Chart

NZD/JPY Intraday Chart

Looking at the NZD/JPY daily chart, prices were converging toward a support at the low while forming a downtrend. If the area marked in white circles is broken, I believe the trend could shift from down to up.

On the intraday chart for NZD/JPY, after forming an inverse head and shoulders, it appears to be creating an uptrend. The uptrend reaches new highs, then retraces to the 61.8% Fibonacci level before rising again.

A cautionary note from here is that in a risk-off scenario, commodity currencies tend to be sold off more strongly. Also, NZD and AUD are high-yield currencies and may be strongly correlated with US interest rates. Therefore, be mindful of the interest rate differential with US rates.