NZD/JPY Forecast Today 21/6: Buy All The Dips (Chart)
Date
6/21/2024 4:39:14 AM
(MENAFN- Daily Forex)
The kiwi dollar has rallied during the early hours on Thursday to break above the ¥97 level against the Japanese yen, which is also essentially the recent highs. With that being the case, the market looks as if it is trying to do everything it can to break out to the upside and I think that it is probably only a matter of time. That's not to say that I believe that the New Zealand dollar is a currency that you need to have a lot of in your portfolio, rather it is to say that the Japanese yen is that week and feckless at the moment.
Keep in mind that the Japanese have absolutely no way of raising rates for any significant amount of time. This is because it will cause a massive recession in Japan. The Japanese government has borrowed so much money that it has absolutely no shot at raising rates for any length of time. Therefore they have come down to one of 2 choices: they can either continue to live with a fairly loose monetary policy, meaning that the currency will continue to drop over the longer term, or they can start to tighten interest rates to save the currency. At the same time watch the domestic economy implode. Remember, Japan has one of the highest debt loads among modern economies in the world.
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Buying Each and Every Dip
The technical analysis for almost all Japanese yen denominated currency pairs is the same. Just simply buying dips every time they occur, and I do think that you have to look at them through the prism of whether or not they offer value. The ¥95.50 level is an area that recently has been supported, and then after that we have the 50-Day EMA coming into the picture right around ¥95. I think it would take serious work to break down below there, and at that point in time it could open up a move down to the ¥93.50 level, where it's even more support.
On the upside, the NZD/JPY market breaking above the recent high, just a few pips from here, then opens up the possibility of a move to the ¥98 level, and by extension we should finally go looking toward the ¥100 level over the longer term.
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