NZD/JPY struggles with 120 pips loss post-New Zealand CPI, Japan trade data in the spotlight

  • Disappointing New Zealand CPI figures dragged NZD/JPY to the lowest since mid-February.
  • Japan trade balance and the US-Japan trade talks could bear market attention.

NZD/JPY is on the rounds near 75.10 during early Wednesday. The pair lost nearly 120 pips to test the lowest level in nine-weeks after New Zealand inflation data strengthened expectations of the RBNZ’s rate-cut in May. Investors may now concentrate on March month Japan trade balance numbers for fresh impulse.

While positive news surrounding the US-China trade deal and overall risk-on sentiment have been helping the NZD/JPY pair off-late, weaker than forecast Q 2019 consumer price index (CPI) data from New Zealand favored broader market consensus of a rate-cut from the Reserve Bank of New Zealand (RBNZ) during May. 

The CPI figure came in at 0.1% on QoQ basis and 1.5% on a yearly format by lagging behind 0.3% forecast for quarterly reading and 1.7% expectations for YoY outcome.

The RBNZ turned bear in March and Governor Adrian Orr recently said that the central bank holds its bearish bias.

Coming up next on the traders’ radar will be Japanese trade balance data. The total merchandise trade balance is likely to have increased to 372.20 billion Japanese Yen (JPY) from 334.9 billion JPY. Further, imports might increase by 2.6% versus -6.6% (revised) prior whereas exports could improve to -0.9% from -1.2%.

It should also be noted that developments concerning the Japanese Economy Minister Toshimitsu Motegi’s trade visit to Washington could also entertain NZD/JPY players.

NZD/JPY Technical Analysis

Should the quote manage to remain under March month low of 74.70, 74.50, 74.00 and 73.80 can become sellers’ favorites.

On the upside clearance of 200-day simple moving average (SMA) figure of 75.10 can help the buyers to confront 100-day SMA level of 75.50 ahead of aiming current month highs near 76.00.

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