NZDJPY On Watch NZDJPY is worth keeping an eye on here. The reversal off the move sub 75.92 is starting to gather momentum and price is fast approaching the bear trend line from 2021 highs and the 77.34 level resistance. With the retail market heavily short the pair and RBNZ rate-hike expectations surging in the face of rising inflation and falling unemployment, there is room for a breakout here. Bulls can look to trade a closing breach of the 77.34 level, targeting 79.19 initially and 80.03 above.With risk assets remaining supported, NZD has seen better demand over recent sessions. Rising commodities prices have created decent support for the antipodean currency while at the same time, JPY has seen outflows linked to diminished safe haven demand, a theme which looks set to continue near-term.Keep An Eye OnUSD flows across the rest of the week look set to be the biggest driver. With NZD benefiting from the current weakness in USD, bulls need to see a continuation of the this dynamic in order for a breakout to work. With this in mind, keep an eye on Thursday’s US inflation reading and Friday’s jobs report. Any unexpected weakness will likely fuel a further rally whereas any consequent USD strength will likely curtail the current NZDJPY rally.
Source: Tickmill
