NZD/JPY bears looking for an extension while trading below critical support

• NZD/JPY bears in control on the broader picture, but bulls holding the fort for now. 
• Central bank themes could be the next catalyst for the commodity complex. 

NZD/JPY has been attracting bears overnight, seeking a break below 68 the figure, but bulls have stepped in again. The Bird has been under tremendous pressure since April yet there seems no let-up in the downside bias and now that the cross had closed below the 2016 lows and the March 2012 highs, the downside still remains compelling. 

There is not much going on out there for the NZD nor with respect to the Yen. However, overnight, GlobalDairyTrade auction results were stronger than expected, with the GDT Price Index falling just 0.2% (against expectations of a 1% fall). "Milk fats and skim milk prices declined, but particularly positive for our dairy producers was the lift in whole milk powder prices (+2.1%) to an average price of US$3100/t. This bodes well for a $7+ milk price for the 2019-20 season. Our forecast is currently $7.10/kgMS while Fonterra’s forecast is $6.25 - $7.25," analysts at ANZ Bank noted. 

Central Banks come back to the fore

Meanwhile, the market's focus for the rest of the week will be with the Federal Reserve, sparking a theme for central banks in general. The macro picture is likely to reemerge as a driver so long as geopolitical headlines remain subdued - Canadia CPI and EZ PMIs will play their part in the central bank theme as well, but the Federal Open Market Committee minutes and Jackson Hole will be specifically enlightening and could be the next driver to make or break the (Dollar) commodity complex in upcoming sessions for which the Kiwi trades as a proxy, albeit not quite as close as the Aussie.

NZD/JPY levels