BoJ Can Cut Short-Term Rates: AUDJPY And NZDJPY Overview

While the markets were focusing on Brexit Vote in the UK Parliament, CB Governors continue to send “easing in monetary policies” messages via the IMF and World Bank’s 2019 Fall Annual Meetings of finance ministers and bank governors in Washington.

First, BoE’s Carney said Britain’s planned Brexit deal would help the country’s economy, but “almost existential” worries about global trade wars might prevent the BoE from raising interest rates.

Asked if securing a Brexit transition meant the BoE would resume raising rates, Carney said: “Not necessarily. I’m not going to pre-commit, there is a lot of contingencies there.”

He said the IMF had stressed the precarious nature of the world economy, which has prompted other central banks including the U.S. Federal Reserve and the European Central Bank to provide more stimulus.

Source: Reuters Brexit deal ‘good news’ but global growth key for BoE rates too – Carney

Carney was followed by BoJ’s Governor Kuroda.

The Bank of Japan will “certainly” reduce short- to medium-term interest rates if it needed to ease monetary policy, Governor Haruhiko Kuroda said, suggesting that deepening negative rates will be the primary tool to fight to heighten overseas risks.

“If we need further easing of monetary conditions, we would certainly reduce short- to medium-term interest rates. But we don’t want to reduce super-long interest rates,”

Full Interview: Exclusive: Kuroda says BOJ can ‘certainly’ cut short-term rates if it were to ease

Considering that other major CBs are planning to increase their relaxation policies – more rate cuts, asset purchases, etc. – the determining factor of the Japanese Yen’s position at this point is the Safe Haven phenomenon.

Keeping the Kuroda’s words in mind, let us take a look at the Asia-Pacific Crosses.

NZDJPY

The pair ended the week above EMA 50 Days period at 69.21. RSI has upside rooms on the Daily Chart. The upside is capped by SMA100 at 69.80. Daily closing above 69.80 would send the pair towards 71.80 SMA200 resistance on the Dail Charts.

Bearish Dragon pattern is completed at 69.20 as seen on the above chart.

I have updated the Live Interactive H4 Chart. Following the Bearish Cypher pattern, the Bearish Shark Pattern would be completed at 69.35. This level can be used as a selling opportunity. However, the short-term bullish trend would remain unchanged as long as the price holds above 68.40.

All potential patterns and targets have been mentioned on the Live Interactive Charts.

AUDJPY

The big picture is similar to the NZDJPY pair. The price closed above EMA50 at 74.32.

EMA 50 support is 73.43 and the short-term bullish trend would remain unchanged as long as the price holds above the EMA 50 support.

Near term key resistance is 74.60 and 75.00. Upperside is capped by SMA200 at 76.10.

We see two major reversal patterns – Bearish Gartley at 75.20 and Bearish Swan at 75.56- in the Dail Chart.

As mentioned in the Live Interactive H4 Chart, Bearish Crab and Bearish Butterfly patterns indicate a minor reversal.

By the guidance of the harmonic patterns in the H4 chart, we can say that the price must break and close above 74.60 to continue its upward move.