Technical Analysis – NZDJPY regains strength above 200-day SMA

Anthony Charalambous, XM Investment Research Desk

NZDJPY pushed back above the 200-day simple moving average (SMA) after finding footing at the 68.15 level, that being the 61.8% Fibonacci retracement of the down leg from 73.52 to 59.45. Assisting the move is the rising 50-day SMA and its recent bullish crossover of the 100-day SMA.

Additionally, the short-term oscillators paint an improving picture though do not rule out some consolidating in the near-term. The MACD, in the positive section, is increasing above its red signal line, while the upward sloping RSI is stalling as it nears the 70 overbought mark. Worth mentioning is the approaching bullish overlap of the 200-day SMA by the advancing 50-day SMA, which could further boost the climb in the pair.

If the pair advances, initial limitations may develop at the critical resistance area from 71.65 – 71.85. Should positive sentiment thrusts the price even higher, the 72.66 obstacle may deter the pair from challenging the peaks of 73.33 and 73.52.

Otherwise, if sellers resurface, early support could come at the 70.00 handle ahead of the 69.09 barrier. Stretching underneath, the 200-day SMA at 68.59 and the 61.8% Fibo of 68.15 (coinciding with the key low), may attempt to halt the descent. However, if steeper declines unfold, the 50-day SMA at 67.80 may impede the price from targeting the support region of 66.48 – 66.24, which includes the 100-day SMA and the 50.0% Fibo.

Overall, a neutral-to-bullish bias exists in the short-to-medium-term timeframe. A break above 73.52 may shift the short and medium-term picture to bullish, while a break below 68.15 may see them re-adopt a neutral tone.