So what’s up with the Kiwi (NZD) nowadays? Well, as you can see from the chart, the New Zealand dollar appears to have been doing well lately. After dipping to a low of 58.674 against the Japanese yen, it has been able to pull itself up and keep its head above water. Presently, the NZDJPY pair is trading just below 62.50. It looks, though, that is already starting to lose some of its upward momentum. It’s also formation what seems to be a rising wedge formation which by the way is a bearish chart pattern. Anyway, a break above 62.50 could send the pair to 64.00 which is exactly where the 50% Fibonacci retracement level is. If the yen continues to weaken and the 50% fib gets broken, the pair could aim for the resistance somewhere around 65.50. On the flip side, a breakdown from the rising wedge formation could nullify its recent gains and send it back down to its previous low at 58.674.
As mentioned in my latest blog, the yen weakened today because of the recent political turmoil in Japan. This morning, Japan’s Social Democratic Party, which is fronted by Mizuho Fukushima, quits its ties with the present government when she got fired after not endorsing the government’s plan to move the US’s base to another island. For the last several months or so, the Japanese yen, together with the dollar, has been the currency of choice whenever there is risk aversion in the market. This recent political disorder in Japan, tough, threatens the currency’s ‘safe haven’ status.
In any, I still think that many investors would still favor then though maybe to a lesser degree against the higher yielding currencies like the NZD if and when fear makes a comeback. Remember that the whole Greek drama is still not over. In the East, the two Korean nations also started with their own telenovela.
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