Thursday, February 19, 2015

Live Call - Long NZDJPY (19 Feb 2015)

There was no change in the Bank of Japan's monetary policy yesterday. They are forecasting a moderate Japanese recovery, but the key takeaway is that they will continue JPY QE for as long as they have to. I saw this decision as mildly bearish for the JPY.

The overall news for the NZD has been bullish this week. Retail and dairy prices have beaten expectations and are up. 

The price action on the NZDJPY is very bullish. There was a strong surge to resistance at 90.000, and a very weak pullback that formed a tiny inside bar that is less than 50% of ATR(5). Short-sellers at 90.000 weren't strong enough to push NZDJPY back down, which is a very bullish sign. 

I'm looking to go long on the break of the 90.000.

(click to enlarge)



I'm also quite bullish on the GBPJPY, but the price action on the NZDJPY seems more cleaner.

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