Technical Analysis – NZDJPY points to 6-year lows as negative pressure persists
Posted on October 7, 2019 at 1:46 pm GMT
Christina Parthenidou, XM Investment Research Desk
NZDJPY is showing no appetite for a meaningful upside correction in the daily chart as the pair approaches the 6-year trough of 66.29 and the RSI and the MACD continue to trend in the bearish area. It is also worth noting that the price has breached an important resistance-turned-support area around the 50% Fibonacci of the five-year old upleg from 45.20 to 94.00 early in August.
A fall under the 66.29 bottom may last until the 65.00 level, which if violated could shift support towards the 64.23-63.20 area.
On the other hand, a reversal to the upside could initially retest resistance near the 50-day simple moving average (SMA) and the 68.20 mark. If the bulls manage to bounce beyond the 50% Fibonacci of 69.10 and more importantly close above the previous high of 69.66, piercing the upper surface of the Ichimoku cloud too, the rally could stretch towards the next key obstacle of 70.45.
In the medium-term picture, the pair is in a negative mode, waiting for a spike above 73.22 to create bullish hopes. Before that, the price should first overcome the wall of resistance around 72.30.
Summarizing, NZDJPY is looking bearish both in the short- and medium-term. A climb above 69.10 would limit downside risks in the short-term, while an upturn above 72.35 is required to change sentiment to the positive in the medium-term.