NZD/JPY Buyers Eye Key Resistance Amid Uptrend
Market Overview
The New Zealand dollar (NZD) has gained momentum against the Japanese yen (JPY), driven by improved global risk sentiment. Investors have shifted toward higher-yielding currencies like the NZD as optimism returns to financial markets. Meanwhile, the Japanese yen remains under pressure due to the Bank of Japan’s continued loose monetary policy. In contrast, economies with more restrictive monetary policies offer higher returns, making the JPY less attractive.
Technical Outlook
In the technical setup, NZD/JPY is in a clear uptrend on the two-hour chart, with buyers pushing the pair toward a critical resistance at 88.093. If the pair manages to close above this key resistance, further bullish movement is likely, targeting subsequent resistance levels at 88.256, 88.341, 88.464, and ultimately 88.693.
Momentum indicators support the bullish outlook. The RSI hovers in the overbought zone, reflecting strong buying pressure. Additionally, the MACD remains bullish, with MACD lines positioned above the signal line. Moving averages are also aligned in a bullish formation, further validating the ongoing uptrend.
Oscillator Confirmations
RSI: Currently in the overbought zone, indicating strong bullish momentum.
MACD: Bullish, with MACD lines above the signal line.
Moving Averages: Both the 34-period and 100-period moving averages support a continued upward trend.
Alternative Scenario
If buyers fail to break through the 88.093 resistance, the price could consolidate or pull back toward support levels at 87.864 and 87.493. A failure to defend these supports could weaken the bullish outlook and lead to a reversal of the current trend.
Key Levels Overview
- Resistance Levels:
- Resistance 5: 88.693
- Resistance 4: 88.464
- Resistance 3: 88.341
- Resistance 2: 88.256
- Resistance 1: 88.093
- Current Price: 88.080
- Support Levels:
- Support 1: 87.864
- Support 2: 87.493
Key Events to Watch
The NZD/JPY pair will be influenced by several upcoming economic events. Japan’s data for August showed a decline in both monthly import and export growth, which weighed on the yen. Investors will closely monitor New Zealand’s upcoming current account data and quarterly GDP growth, scheduled for release on Thursday. Should New Zealand’s growth come in stronger than expected, it could further bolster the NZD and extend the current rally.
Conclusion
The NZD/JPY pair is testing a key resistance level at 88.093, with technical indicators suggesting that buyers maintain control. A sustained move above this level could drive the pair toward the next set of resistance levels. However, any failure to break through could trigger a pullback toward 87.864 and 87.493. Traders should keep an eye on New Zealand’s economic data and broader global risk sentiment, as these factors will likely dictate the pair’s next move.