NZDJPY is coming down sharply as expectations for a Bank of Japan rate hike at next week’s meeting have increased, strengthening the Japanese yen, while the New Zealand dollar weakened following the latest RBNZ decision and its less hawkish-than-expected outlook.
Technically, NZDJPY is breaking below the channel support connected from the April 2025 lows, suggesting that the pair is stepping into a higher-degree correction. After completing a five-wave advance in wave A, the market is now already in the third leg of the current pullback in higher-degree wave B, meaning that sooner or later we could see some stabilization.
There is support around 89, followed by the 86 area, where we also have the 61.8% Fibonacci retracement. This entire zone is therefore important for a potential new rebound while the market trades above the 79.84 invalidation level.
Big Picture
On the monthly chart, the larger bullish diagonal formation remains valid, with the potential for wave V to retest the 99–100 area in the bigger picture.
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