NZD/JPY is an uptrend that started in March 2020, which means that the New Zealand dollar has been gradually becoming stronger than the yen for 4 years. This also means that investments in the New Zealand dollar have been as reliable as Swiss watches for a long time, bringing stable profits to investors, all thanks to the unchanged monetary policy of the Bank of Japan despite all modern trends. So why should we choose the deals to SELL instead of further purchases in 2024? Or should we shouldn't, in the expectation that the New Zealand dollar will continue its multi-year rally in this currency pair?
On the last day of 2023, the Chinese PMI was released, which remained very low in December and missed expectations, which certainly supported the safe-haven yen, but then we see a resumption of upward movement amid the news vacuum at the beginning of the year. Next week will certainly be more volatile, because the publication of inflation in Japan is expected, which will be of great interest to investors, given the expectations from the Bank of Japan to change monetary policy, and of course the trade balance in China will be published, according to which investors will evaluate export prospects for New Zealand.
Most technical analysis tools indicate the effectiveness of the deals on the trend. We believe that this time we can trust technical analysis and open new deals to Buy, since at the moment we do not see any serious threats to the current trend. As for the monetary policy of the Bank of Japan, the maximum they can decide on is 1-2 rate increases. There will be no rally unless there are some extraordinary geopolitical events or economic disasters in the Asian region.
