Chart of the Day NZDJPY
NZDJPY : New Zealand manufacturing data showed a slight fall in sales, but much stronger production was implied as inventories were rebuilt. The data under the surface was strong enough for market watchers to revise up our NZ Q3 GDP estimate (due next week) from 0.3% to 0.5% QOQ. That doesn’t sound flash, but it would still be one of the strongest prints for the quarter compared to major developed economies.
JPY:Japan economic watcher survey pointed to brighter outlook: The economic watcher survey reported that its current condition index picked up to 39.4 (Oct: 36.7), a modest improvement. Notably the expectations index rose to 45.7 in November (Oct: 43.7), a seven-month high that was driven by household’s upbeat expectations over the economy, a positive sign for Japan’s consumption outlook.
NOTE: Both the NZD & JPY are vulnerable to trade headlines. US Agriculture Secretary Sonny Perdue would manage to hog headlines today, commenting that he does not see the Dec 15th tranche of tariffs being implemented, given that there has been some “backing away” by China through its waiving of retaliatory tariffs on some US imports including pork and soy. This contrasts somewhat with comments from White House economic adviser Larry Kudlow before that, without a deal, the tariffs would be implemented. The back-and-forth headlines may shift sentiment, but for all intents and purposes, the decision ultimately lies with Trump who gets the final say on whether he wants to be the Grinch that stole Christmas from the global markets.
From a technical and trading perspective, NZDJPY is testing pivotal trendline resistance for the third time, this third test should contain the current advance, the price is also pausing at projected internal trendline resistance. The trendline combination also coincides with the 78.6% Fibonacci retracement from the summer swoon, it is also a few pips shit of completing an equidistant swing objective sited at 71.71, as this resistance cluster caps the current advance price has the potential to pull back to test symmetry swing & trendline support sited towards the 69.00 level, however, it should be noted that there is decent support in play at the 70.00 level and bulls may reload here to retest the trendline resistance for the fourth and probably final test.
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Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!