NZDJPY Weekly Outlook December 3-7

• NZDJPY Weekly Outlook December 3-7

The just concluded G20 summit in Argentina has changed the direction of the forex market following the temporary truce between the US and China on the trade deal.

Despite the Federal Reserve signalling possible slow down in rate increase last week, the 90 days agreement between President Trump and Xi should boost commodity outlook and aid business confidence of commodity-dependent currencies.

The New Zealand dollar is a unique commodity dependent currency because it doubled as a haven currency, and with the Federal Reserve likely to slow down the pace of interest rate increase more funds will flow into emerging economies.

Also, with the temporary trade agreement, the New Zealand economic outlook will improve as exports are expected to surge.

Although New Zealand retail sales were flat in the third quarter, while Japan’s retail sales rose 3.5 per cent. Still, a decade-long weak inflation rate in Japan is weighing on growth.

Technically, the Kiwi has been falling against the Japanese Yen since July 2017 following growing uncertainty amid trade war. However, the recent surged in commodity outlook boosted the currency above the descending channel. I will expect NZDJPY to sustain its bullish run above 77.71 price level following the trade agreement with 79.13 as the target.