Trading the most Volatile Pair of the Day - NZD/JPY Intra-day Analysis

The session remains active despite the U.S and UK markets being closed today, May 26, in observance of Memorial Day and the UK Spring Bank Holiday. While cash equity markets are shut, index futures remain open and are taking cues from strong performances in Europe and Asia, where most indices are trading over 1% higher.

Gold is down 0.86%, reinforcing a risk-on sentiment to start the week.

In FX, the absence of U.S. flows hasn’t muted volatility. Asia-Pacific currencies showed notable moves, with the New Zealand Dollar leading gains, followed closely by the Australian Dollar. The Japanese Yen, on the other hand, is lagging on the positive sentiment.

NZD/JPY is an interesting pair to trade when US Markets are closed, as these Asian Pacific currencies tend to experience more volumes. The session is late there, though opportunities are always available.

NZD/JPY has been trading in a range throughout the month of May with an upside breakout that got rejected as Pacific Currencies as got weaker from a dovish cut from the RBA.
The main pivot for the range is near current prices, at 86.150.

Monitor any break or rejection of this level on the 4h Timeframe.
The MA 200 is flat though below current prices, indicating no trend, another contributor to the rangebound price action.

The pair is approaching the Main Pivot with a mild rejection from today's highs, after a 750 pip rally from the Sunday open.
The RSI is also confirming the rejection as the overbought condition did not maintain buying momentum.

Buyers will want to keep their hands on the buying trendline from Friday 23, with the next support at 85.70.
A rebound from current levels would point towards the Main Pivot at 86.15.

Sellers expect to continue the rejection towards the low of the range at 85.37.

In the overnight session, the NZD enjoyed some relief from last week’s drag from the Australian Central Bank cut. The outlook for the NZD is unclear, as most expected a cut before the latest New Zealand Survey as we approach the RBNZ Rate Decision on Wednesday, the 28th, at 10:00 PM E.T.

Safe trades!

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