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New Zealand dollar may rise and copper price outlook stands at record high

By on April 26, 2021 0

New Zealand Dollar, NZD / USD, Copper, Bank of Japan, Japanese Yen – Asia Pacific Market Opening

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The growth-linked New Zealand dollar has outperformed the US dollar over the past 24 hours, rising alongside the Australian and Canadian dollars. Market sentiment was broadly optimistic, with indices in Europe and North America closing in the green. On Wall Street, the Dow Jones, the S&P 500 and the highly technological Nasdaq Composite achieved -0.18%, + 0.18% and + 0.87% respectively.

The economic calendar was fairly calm on Monday, except for expectations from German IFOs and durable goods orders in the United States. Both results fell short of expectations, hinting traders were likely focusing on broader fundamental themes. Markets can look forward to the Federal Reserve later this week, where the central bank is expected to reiterate recent dovish rhetoric.

Perhaps this is why growth-oriented stocks have outperformed, with yields on Treasuries falling. The 10-year rate initially rose over the past 24 hours, but gave up most of its gains at the close. Most of the first quarter earnings reports have been bullish, which has further compounded the bullish tone of investors so far. This despite the announcement of US President Joe Biden long-term capital gains tax hikes for the rich.

Technical analysis of the New Zealand dollar

NZD / USD closed at its highest level since March 4e Monday, extending last month’s low. The breakout above the 23.6% Fibonacci extension at 0.7174 and downside resistance from February was confirmed, exposing the 38.2% level to 0.7316. Beyond the latter, there are peaks of 2018, making it a critical area of ​​resistance between 0.7395 and 0.7437.



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NZD / USD – Daily chart

New Zealand dollar may rise and copper price outlook stands at record high

Chart created in TradingView

Tuesday Asia-Pacific Trading Session – Copper, Bank of Japan

The pink tone of the market could extend into the Asia-Pacific market hours on Tuesday, with a particular focus on copper. The red metal, which is frequently used as a barometer of global growth, closed at its highest level since 2011. A combination of Chinese demand and a climate change policy is likely to push copper up. Red metal mining tends to contribute to climate change, so reducing emissions can create supply imbalances.

The Japanese yen will also wait for the Bank of Japan‘s monetary policy announcement. But the central bank should keep its key rate and its 10-year yield target in abeyance. Traders will pay more attention to the impact of its outlook on the economy on asset purchases. Nonetheless, bond yields in Japan could remain quite low compared to other regions of the world, leaving the JPY to focus on its anti-risk market momentum.

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Technical analysis of copper

Copper futures extending gains above a Descending triangle, opening the door to greater appreciation. Prices are just below all-time highs making it a key area of ​​resistance between 4.54 and 4.65. The negative divergence of the RSI shows that the upward momentum is waning, which can sometimes precede a downward turn. Such a result would likely place emphasis on the 50-day simple moving average for key support.

Copper Futures – Daily Chart

New Zealand dollar may rise and copper price outlook stands at record high

Chart created in TradingView

— Written by Daniel Dubrovniksky, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

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