Source: PaxForex Premium Analytics Portal, Fundamental Insight

The New Zealand Trade Balance for February came in at -NZ$218M monthly and at -NZ$11,990M annualized. Forex traders can compare this to the New Zealand Trade Balance for January, reported at -NZ$1,089M monthly and -NZ$12,620M annualized. Exports for February came in at NZ$5.89B, and Imports at NZ$6.11B. Forex traders can compare this to Exports for January, reported at NZ$4.82B, and Imports reported at NZ$5.90B.

The Japanese National CPI for February was flat at 0.0% monthly and increased by 2.8% annualized. Forex traders can compare this to the Japanese National CPI for January, which was flat at 0.0% monthly and rose by 2.2% annualized. The Japanese National Core CPI for February increased by 2.8% annualized. Forex traders can compare this to the Japanese National Core CPI for January, which rose 2.0% annualized.

Foreign Buying of Japanese Bonds for the period ending March 16th came in at -¥803.9B, and Foreigners Buying of Japanese Stocks at -¥1,461.6B. Forex traders can compare this to the Foreign Buying of Japanese Bonds for the period ending March 9th, reported at ¥1,582.9B, and to Foreigners Buying of Japanese Stocks at ¥374.3B.

The Japanese Yen began to strengthen after the Bank of Japan ended its negative interest rate policy. It was the last central bank to keep its benchmark rate in negative territory. The Bank of Japan also cautioned against massive Japanese Yen moves and confirmed its commitment to interfere in the Forex market as necessary. After the Bank of Japan became the last central bank to eliminate negative interest rates, the Swiss National Bank became the first to deliver an interest rate cut in 2024 among developed market central banks.

The forecast for the NZD/JPY remains bearish after this currency pair completed a breakdown below two horizontal support areas, turning them into resistance. Short-term volatility could increase with the Kijun-sen and the Tenkan-sen flat after a bearish crossover and price action trading below both. The contracting Ichimoku Kinko Hyo Cloud adds to downside pressure, with the Senkou Span A moving lower and the Senkou Span B flat. A bearish crossover could extend the current sell-off. Traders should also monitor the CCI following its breakdown from extreme overbought territory. A move below zero could accelerate the contraction, and this technical indicator has plenty of downside potential. Can bears maintain control over the NZD/JPY and force price action into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.

Should price action for the NZD/JPY remain inside the or breakdown below the 90.700 to 91.250 zone, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Short Position
• Entry Level: Short Position @ 91.000
• Take Profit Zone: 88.600 – 89.150
• Stop Loss Level: 91.650

Should price action for the NZD/JPY breakout above 91.250, PaxForex recommends the following trade set-up:

• Timeframe: D1           
• Recommendation: Long Position
• Entry Level: Long Position @ 91.650
• Take Profit Zone: 92.000 – 92.400
• Stop Loss Level: 91.250

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