Forex Analysis Report 11-4-18...NZD/JPY Going Higher Depends On A US-China Trade War Agreement

The US and China trade war has been going on for months. The tariffs have been blamed for weakening China’s manufacturing sector. Last week, President Donald Trump announced that he is going to make a big deal with China.

Such a move indicates the strengthening of the New Zealand dollar against the Japanese yen. China is an important trading partner of New Zealand. The normalization of its relations with the US can support the New Zealand currency. In turn, the attractiveness of the yen as a safe haven asset in Southeast Asia may decline.

As expected, Japan keep its interest rate at -0.1%, which is an additional negative factor for the yen. The next meeting of the Reserve Bank of New Zealand will take place on November 7. They are expected to not change their rate either (+ 1.75%). The difference in interest rates and a trade ware agreement can contribute to the increase in the NZDJPY currency pair.

Lets go to the charts to see where price might head next.

Monthly Chart (Curve Time Frame) - monthly supply is 91.000 and monthly demand is 62.500.

Weekly Chart (Trend Time Frame) – the trend is down, as indicated by the descending channel. A channel is drawn from trendlines charted along the support and resistance levels.

Daily Chart (Entry Time Frame) – two nice trade set-ups were already triggered when price hit the daily supply at 76.75 and 75.25.

I don't see any other trade-set ups at the moment, but I do see a potential day trade.

On the 4 hrs chart, the chart suggests to short price if you get confirmation that price wants to head lower at the 4 hr supply zone at 75.90. However, the zone is right below the whole number of 76.000, so price may overshoot the level before potential heading lower.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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by rollandthomas

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