NZDJPY has been stuck inside a broad range since February, bounded by resistance at the 95.00 psychological level and support at the 91.00 mark, and the pair is now sliding back down toward the lower boundary after a sharp pullback from the top of the range.
Price recently tagged the 95.00 ceiling for a second time before reversing lower, and the pair has since fallen back toward the 92.50 area, putting the 91.00 support zone back in focus.
If sellers manage to push price through this floor, a measured move based on the height of the range could open the door to a slide toward the 87.00 area or lower.
On the other hand, if the 91.00 support holds one more time, NZDJPY could stage another bounce back toward the middle of the range or the 95.00 resistance once more, keeping the longer-term consolidation intact.
The 100 SMA is still above the 200 SMA, reflecting that the path of least resistance has been to the upside for most of this range, but the gap between the two moving averages has narrowed considerably as price has pulled back, and a bearish crossover could be brewing if the selloff continues.
Stochastic has dropped sharply from the overbought region and is now approaching the oversold area, reflecting a strong shift in momentum in favor of sellers. The oscillator has limited room left before reaching oversold territory, which could mean the selling pressure is close to being exhausted.
RSI has also turned lower from around the 70.00 mark and is now hovering near the midpoint, still with some room to fall before reaching oversold levels. If the indicator keeps sliding alongside price, it would support the case for a test of the 91.00 support and a possible breakdown from there.
NZDJPY has been edging lower since the hawkish Bank of Japan decision and confirmation of yen intervention, which could keep a lid on rallies in the near-term.
Comments
Log in or sign up to join the conversation.