The pair recently established a significant spike up, which signals a monumental change in the underlying sentiment. After concluding a significant bearish trend, which was initiated in the wake of the initial market crash in late-March, the price action looks ready to revert its course, and start climbing back up.
Even though the underlying bullish bias is rapidly rising, this does not mean that the bulls could place their buying orders just anywhere. Instead, they might prefer to sit and wait for a new bearish correction to be established before they join the market.
The GBP/NZD has been going up for six consecutive days, which means that with each subsequent day of gains, the likelihood for the emergence of a minor retracement is increased. That is why such potential retracements encapsulate the underlying risk from buying in at the current market price in the near term.
Therefore, the purpose of today's analysis is to examine the crucial price levels associated with the presently emerging bullish trend and to sketch its most likely future progression
As can be seen on the daily chart below, the aforementioned bearish trend is represented by the downwards sloping channel. Once the underlying price action managed to break out above its boundaries, this signalled the termination of the downtrend and the beginning of something new.
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Fed commitment to keep rates unchanged until 2022.
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The USD/JPY pair maintained its heavily offered tone through the mid-European session and was last seen trading below mid-105.00s or the lowest level since March 16.
The pair extended last week's bearish break below the 106.65-60 strong horizontal support and witnessed some strong follow-through selling on the first day of a new trading week. The downfall was led by the prevalent bearish pressure surrounding the US dollar and concerns about worsening US-China relations.
Investors remain worried that the resurgence in coronavirus cases in the United States could undermine the US economic recovery. This coupled with speculations that the Fed would add more stimulus to support the economy exerted some heavy pressure on the USD and was seen as a key factor dragging the USD/JPY pair lower.
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Australia reports a record trade surplus in May
Australian iron ore exports to China are up
Australian ability to combat the virus makes the Aussie an attractive option
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