NZDJPY Daily – Since the start of 2016, this pair has entered a downwards trending channel which it has followed well. Recently, it tested the bottom of the channel but was unsuccessful in breaking out and is now heading towards the top of the channel which is crossing over with the 78.6% Fibonacci level. This upwards movement is supported by a fairly strong New Zealand economy which is in a good position to make changes if the uncertainty in the world economy increases due to the exit of the UK from the European Union. New Zealand have room to cut their interest rates without going into negative territory and with a strong Kiwi keeping inflation at a low rate, there is a large amount of pressure on the Reserve Bank of New Zealand to lower interest rates. Meanwhile, Japan’s economy struggles are not improving as growth is continuing to fall. The MoM retail sales figures for May were unchanged from the previous month and the Yen is continuing to strengthen despite the negative interest rates. This is adding a lot of pressure on to the economy, with investors predicting that Japan’s economy may be pushed back towards deflation. We could now see NZDJPY head towards the 75.83 level before coming back down to once again test the bottom of the channel. Alternatively, if the world economy situation continues to worsen, we may see this pair drop towards 69.2 and then 57.