New Zealand dollar explodes on "yen effect"

Jobless claims decreased by 42,000 to 346,000 in the week ended April 6, from a revised 388,000, Labor Department figures showed today in Washington. The U.S. stock markets continue to march higher, with the JUN13 E-mini S&P 500 trading up 5.5 points to another record high at 1588.50. We maintain that our next target level is 1615.  The JUN13 Nasdaq, which was up more than the S&P yesterday on a percent basis, is trading slightly down today at 2848, or down .16%. We believe that the BOJ’s policies are making massive waves in the markets, and some markets may still have catch-up to do to reflect the potential implications of the massive stimulus policies of the Bank of Japan.

The Japanese yen is trading at 100.52 at this juncture, and we believe the selling may not be finished. We would not be surprised to see more selling in the yen. However, before that, the yen may correct, but we have 102 as key resistance.

Natural gas futures are up around 1%, trading at $4.13. If this market can break above the recent highs of $4.18, we believe the next target is $4.25, and possibly higher. The natural gas market is notoriously volatile, thus the market is easily capable of overshooting technical targets. With that said, on a more general level, we believe there are strong bullish forces supporting the natural gas market.

We focus more on the New Zealand dollar today. The NZD has been in an interesting bullish run recently, likely the direct effect of investors selling yen and buying other foreign currencies, such as the NZD. As we have noted on the chart, the NZD has broken out of its recent bullish triangle technical pattern. We believe the .84 level will be very good support for this market going forward, and we believe this market has potential to head towards .90, as investors may continue to look for potentially higher yielding currencies.

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About the Author
Anthony Lazzara

Anthony Lazzara, CEO of Newport Beach, Calif., commodities investment firm Lido Isle Advisors, spent 10 years as a trader and floor broker at the Chicago Board of Trade and Chicago Mercantile Exchange. Anthony has significant experience in the energy, fixed income, and equity futures markets. After being a long-time independent futures trader, Anthony saw a tremendous opportunity to educate investors on how to invest in professional traders. Anthony is now focused on his duty as CEO of Lido Isle Advisors.

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