The pair containing the New Zealand dollar and the Japanese yen looked set to rise further on the price charts on Wednesday – and even head back into the region of its previous monthly high point.
The NZD/JPY pair was due to approach the 71.98 level, which was its best performance so far in September.
The technical forecast was made by analysts following some concerted action on the price charts.
At one stage, the pair appeared to develop support at a point close to the psychologically important level of 70.
The support it found there was described as “mobile”, and was around its 50-day moving average level of 70.19.
According to strategists, the pair’s Relative Strength Index – which tracks how ‘overbought’ a currency might be – is also pointing towards a rise for the currency.
In the event that this does not materialise though, the pair could soon find itself dropping down to the 68.76 region, which was the worst performance it recorded in the month of August.
Interestingly, the rise in the value of the Kiwi dollar – if it transpires – would reflect a similar pattern observed in the NZD/USD pair.
In this pair, moving averages from various timeframes all suggested that the price of the pair is well-supported.
Analysts also identified a graph position known as an Ascending Channel.
This came despite the fact that the Kiwi dollar recently had almost three percentage points wiped off its monthly best performance level in this pair.
This, suggested analysts, could simply be a short-term problem and in essence a basic market correction.
Looking more broadly at fundamental factors, meanwhile, the Kiwi dollar is now likely to also have to grapple with some major events in the coming days.
Late on Wednesday, for example, there will be a gross domestic product release from the country at 10:45pm GMT.
This will cover Q2 2020, and is expected to show a year-on-year change from -0.2% to -13.3%.
There will also be a quarter-on-quarter release out at the same time.
This is due to show a change from -1.6% to -12.8%.
On Monday of next week, meanwhile, there will be a credit card spending release for August.
Traders and analysts are likely to interpret this as an indicator of how confident consumers are with their spending in the immediate aftermath of the coronavirus pandemic – which, despite not hitting New Zealand as hard as some other countries, has still had some consequences.
On a year-on-year basis, this was last recorded at -5.8%.
There is currently no indication of where it will go next.
Looking ahead to next Wednesday (23rd September), meanwhile, an interest rate decision from the Reserve Bank of New Zealand is expected at 2am GMT.
Interest rates are widely expected to be held at 0.25%.
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