NZDJPY has been forming an ascending triangle pattern on the short-term time frame, with the pair carving out a series of higher lows along a rising trend line support while repeatedly running into a ceiling near the 94.00 major psychological level.
Price is currently at 93.41 and inching closer to this horizontal resistance, suggesting that a decisive move could be around the corner.
If the resistance holds as a ceiling once again, NZDJPY could pull back toward the rising trend line support, which is now approaching the 93.00 major psychological level.
A larger correction could extend toward the 92.00 handle or lower, though the pattern’s higher lows suggest that buyers remain active on dips and are not giving up much ground.
On the other hand, a convincing break above the 94.00 resistance could confirm a bullish breakout from the ascending triangle. In that scenario, the measured move target, calculated from the height of the formation, could point NZDJPY toward the 96.00 area or higher in the sessions ahead.
The 100 SMA is currently below the 200 SMA, however, suggesting that the path of least resistance is still to the downside or that a breakout to the upside could face headwinds. The gap between the indicators appears to be narrowing, though, which could reflect a gradual shift in momentum in favor of the bulls.
Stochastic is surging from the oversold area and appears to be heading toward the overbought zone, reflecting strong bullish pressure at the moment. The oscillator could keep climbing before sellers get a chance to step back in.
RSI is also trending higher with plenty of room to run before reaching overbought conditions, so price could keep following suit while buyers have the upper hand.
NZDJPY could take cues from overall market sentiment, as the focus has been on geopolitical headlines lately. A meaningful breakthrough in US-Iran negotiations could mean upside for the risk currency, though yen losses could be limited by intervention efforts.
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