NFP aside NZDJPY turns down short term

NZDJPY, Daily               

The dollar has remained buoyant today amid market expectations for a decent U.S. jobs report. USDJPY nudged to an intraday high at 113.25, since settling around 113.05-15, USDCHF edged out a three-day high, and EURUSD was trading at intraday lows under 1.0740 as of the early European PM session. Near-term speculative market positioning is said to be relatively neutral, with participants wary of market-moving Trump tweets. The January U.S. jobs report arrives today with upside risk following the strong ADP employment report and solid jobs component in manufacturing ISM data. Markets are expected a 200k headline versus December’s 156k, with unemployment expected to remain unchanged at 4.7%. Any upside surprises would sharpen risks for a Fed rate hike as soon as March, which would underpin the dollar (Fed funds have been discounting about 35% odds for a March hike).

Meanwhile on NFP day the NZD is coming off its recent run and of all the crosses NZDJPY looks of most short term interest. The recent top last Friday ((January 27) has been sold off all week and the yesterday confirmed the entry at 82.300. This position is against the higher time frame trend and so target 1 is a little over the 14DATR at 81.500. The parabolic SAR turned on Wednesday and the MACD is negative, at 52 the RSI is neutral but sloping down.  Resistance to the move lower is the 20 day MA around 80.000 and the 50 day MA at 81.60.    


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Stuart Cowell

Senior Market Analyst


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