I Expect NZD/JPY To Depreciate To 76.50

Although NZD/JPY is not directly connected to the USD the hiking of the US Federal Funds Rate did have an effect on that pair too. NZD/JPY reached a resistance and a local high at 76.869 and it could not overcome 76.90, beginning a depreciation. Yesterday the depreciation was 57 pips, but today, after the European Central Bank announced its interest rate, the pair retraced almost half of yesterday’s drop.

There are two possible scenarios for further development:

In my opinion, the priority scenario is for a renewal of the depreciation toward the next support at 77.00 – 76.90 and should the pair overcome that support there could be a drop to 76.50.

The alternative scenario is for a renewal of the move north from 76.50 – 76.30 to 79.00+.