New Zealand reported a duo of economic reports which showed that the economy cooled down further. After the central bank cut interest rates, forex traders try to determine if more cuts are on the horizon or what other measures will be deployed. The New Zealand economy is heavily dependent on commodity exports, mainly to China, as well as closely tied to the Australian economy. Australian economic data released this morning also showed a slower economy ahead. The NZDJPY is pressuring support levels, is a breakdown imminent or will the threat of interventions by the Bank of Japan result in a price action reversal? Today’s fundamental analysis will take a look at the upside potential and downside risk of this currency pair.

Japanese household confidence decreased further in August and remains at depressed levels. The stronger Japanese Yen is not providing a spark to the consumer, but is impacting Japan’s exporter in a negative way. The currency is attracting plenty of capital inflow due to his save haven status, but the Bank of Japan warned traders that it will not stand by and allow the Japanese Yen to strengthen much further and harm its struggling economy. When will the central bank intervene and weaken its currency? Should forex traders look for long trading opportunities in the NZDJPY? Follow the PaxForex Daily Fundamental Analysis and take the profitable side of this trade!