The downward trend continues, despite the fact that in September we can see a strengthening in commodity currencies. Investors' optimism regarding the possible resolution of the trade conflict between China and the United States is largely unjustified, but positively affects the value of commodity currencies. Meanwhile, all negative factors affecting the NZD remain and may at any time become decisive for investors.
This week, the New Zealand dollar strengthened not only due to external supporting factors, such as the recent encouraging comments of Donald Trump, but also due to the decision of the RBNZ to leave the rate unchanged this time, after it was reduced by 50 pips earlier. Recent reports on the New Zealand economy show a deterioration in the economic situation. In particular, the trade deficit in August more than doubled compared to the previous month, and the GDP growth rate of 2.1% was the lowest since 2013.
The only reason why the NZD did not fall against the yen was its weakening this month. Given investors' willingness to take risks, the JPY is not the most popular asset among investors today. Perhaps the situation will change next week, with the publication of new data on business activity in China, especially the manufacturing PMI index and the index of manufacturers' sentiment in Japan.
On the chart, we can see a consolidation of the rates since August in the range of 66,757-69,614 JPY. In the near future, we can expect the continuation of the rates in the lateral range. At the same time, the MACD and Stochastic oscillators indicate the efficiency of the deals to BUY in the short term, but in the long term, the deals to SELL will still be the most optimal, taking into account all the risks for the weakened New Zealand dollar. An entry point can also be specified at the levels of 66,757 and 69,714 JPY, the breaking of which will signal the continuation of the trend reversal.
