Japanese Yen Advances on Risk Aversion, New Zealand Dollar Remains Weighed

The Japanese Yen strengthened against the greenback on Thursday to halt the three-day decline, and the USD/JPY may continue to retrace the advance from earlier this week as investors scaled back their appetite for risk ahead of the U.S. Non-Farm payroll report due out tomorrow at 13:30 GMT. The dollar-yen slipped to a low of 89.99 during the European trade and remains lower on the day after moving 85% of its ATR, and the pair may continue to hold below the 50-Day SMA at 90.92 throughout the U.S. session as the 30-minute RSI approaches overbought territory. Nevertheless, as global equity prices turn higher, we could see the exchange rate close above the 20-Day SMA (90.70) as market sentiment improves. However, as the USD/JPY lacks momentum to mark a fresh daily high, we are likely to see the pair hold a narrow range throughout the day as  investors weigh the outlook for global growth.

The New Zealand dollar weakened against the greenback and remains the worst performing currency on the day after slipping to a low of 0.7160, and the NZD/USD may continue to hold below the 10-Day SMA (0.7302) over the remainder of the week as the downturn in the labor market reinforces a dour outlook for private spending. The kiwi-dollar has moved nearly 62% of its average true range and has bounced back from the low to cross back above the 50-Day SMA at 0.7198 however, we are likely to see the pair hold a narrow range over the next 24 hours of trading as market participants curb their temperament for higher-yielding currencies. Nevertheless, the rebound in global equities could follow through into the foreign exchange market and may push the New Zealand dollar higher as traders move into higher risk/reward investments, but we are likely to see the pair hold the narrow range from earlier this week as the economic outlook global growth remains highly uncertain.