The uptrend continues for the sixth month in a row, although its intensity has significantly decreased this summer. There are all signs of the flat trend formation, but it is too early to talk about this, since the demand for safe assets is limited.
This week, we have observed the strengthening of safe assets (except gold) due to the growing fears about the second wave of coronavirus outbreaks and the introduction of new quarantine restrictions in a number of European countries. However, we should not forget that a vaccine is actively being developed, and as soon as it is ready for use, investors will return to risky assets.
This week, the New Zealand dollar declined against the yen following the RBNZ meeting, where we spotted a dovish rhetoric and a readiness to increase economic stimulus next year. The RBNZ confirmed its readiness to return to the revision of the rate in March next year, and most likely in the downward direction. In addition, data on New Zealand's GDP published recently showed the economy contracted at the biggest pace on record, which played a role in the dollar's weakening.
Next week, the New Zealand dollar may be supported by the publication of reports on business activity in China, but at the moment, we expect the downward movement to continue for the third day in a row and consider the deals to SELL as more effective in the short term. Most technical analysis tools also recommend the deals to SELL.
