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NZD/JPY: Short Review & Forecast

Published on: 17/02/2017

The quotes of the NZD/JPY pair continue to be in the frames of the flat trend which was formed at the end of last year. At the same time, volatility has increased significantly and there is a high probability of trend changes.

Most likely we can expect the beginning of a new trend in early March. It's impossible to say what trend we'll finally get because the NZD and JPY have the same factors that can lead to the weakening or strengthening of both currencies: that is certainly the trade policy of the President of the United States and the value of the American dollar. In addition, the cost of raw materials' prices can also affect the rates because both countries depend on the prices of various raw materials and foods.

NZD/JPY, H4 chart
Last week the Japanese yen strengthened against the NZD on a weak growth in retail sales - only 0.8% against a forecasted 1%. Additionally, the business activity index in January didn't inspire the market, though the recent data was positive. Still, investors expected more. However, considering the rising prices of raw materials and food, we can't say if there are prerequisites for the beginning of a downtrend.

In this situation it is best to open the deals to buy, making a profit on the price correction. The Stochastic oscillator also indicates this.

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