The US dollar fell rather precipitously during the trading session on Monday initially against the Japanese yen, reaching down below the ¥113 level. This is an area that has been resistance previously, so at this point I think that there are buyers willing to lift from there, as we have seen. This is a market that has been important on longer-term charts as well. At this point, I think that the market probably goes to the ¥114 level, perhaps even the ¥114.50 level. This was essentially a “risk off” type of move, which of course makes quite a bit of sense. I think at this point it makes sense that we have turned around to rally based upon the interest rate differential that of course will continue to favor the upside.
The New Zealand dollar initially dropped a bit during the trading session on Monday but turned around to show signs of life again. The 0.65 level above will be resistance though, and I think that we will get a bit of a rally, only to be followed by selling. I think that any signs of exhaustion could be an opportunity to start shorting again as the New Zealand dollar has of course been wasted by the US/China trade meltdown, and of course any troubles with risk appetite overall. I think that we will continue to see both the New Zealand dollar and the Australian dollar fall, mainly because of that situation which is not getting any better. When I look at this chart, it is technically a move to the 0.63 handle just waiting to happen. If we break above the 0.65 handle, I think that the 0.66 level above will be even more resistive. I have no interest in buying this pair.
This article provided by NewsEdge.