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Yen May Gain as Weekend Dow Jones Futures Fall, NZD Eyes RBNZ Stimulus

Yen May Gain as Weekend Dow Jones Futures Fall, NZD Eyes RBNZ Stimulus

Daniel Dubrovsky, Strategist

Japanese Yen, New Zealand Dollar, RBNZ, NZD/USD – Asia Pacific Market Open

  • Japanese Yen may gain with weekend Dow futures pointing lower
  • NZD/USD could fall after RBNZ announced bond-buying program
  • Markets eyeing next U.S. fiscal measures to help economic growth

Yen May Gain, New Zealand Dollar May Weaken on RBNZ easing

The anti-risk Japanese Yen may gain as Monday’s Asia Pacific trading session gets underway. Weekend Wall Street futures – courtesy of IG – showed the Dow Jones aiming over 2.5% to the downside from Friday’s close. Meanwhile the New Zealand Dollar is at risk after the Reserve Bank of New Zealand announced further monetary stimulus measures.

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The RBNZ is going to implement a $30 billion large scale asset purchase program consisting of New Zealand government bonds across a range of maturities. The Committee judged that these actions were needed to meet inflation and employment objectives amid the coronavirus outbreak plaguing global growth. This program is anticipated to be conducted over the next 12 months and adjustments could be made.

Over the weekend, coronavirus cases in the United States totaled 30,000 with those in New York rising to 15,000. On Sunday, Italy reported 3,957 cases which brought the country’s total to 59,138. Meanwhile countries around the world continued to take measures on social isolation. Germany limited public gatherings to no more than 2 people. In the U.S., states such as Ohio, New Jersey and Illinois limited outside venturing.

Last week, the S&P 500 dipped 15% in its largest drop over 5 days since October 2008. This is as the haven-linked US Dollar rose, trimming some gains on Friday during temporary periods of “risk-on” trade. The markets are eyeing a further U.S. fiscal response. There are mixed signals about when a vote on a new stimulus bill could come. The Republican-majority Senate is eyeing Monday as Democrats draft their own bill.

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New Zealand Dollar Technical Analysis

NZD/USD may be on the verge of resuming losses if prices can close under the 23.6% Fibonacci extension at 0.5686. On the 4-hour chart below, the New Zealand Dollars appears to have closed under near-term rising support from last week’s bottom. That may lead to retest of key support which is a range between 0.5466 to 0.5521. Otherwise, a close above falling resistance from March 11 may see gains accelerate.

NZD/USD Mixed
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 4% 6% 4%
Weekly -13% -23% -16%
What does it mean for price action?
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NZD/USD 4-Hour Chart

NZD/USD 4-Hour Chart

Chart Created Using TradingView

--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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