NZD/JPY Price Analysis: Aims higher in the middle of an upbeat market as bull’s eye 79.00
|- The NZD/JPY edges higher for the second day in a row, up some 0.37%.
- NZD/JPY Technical Outlook: The pair is upward biased, but downside risks remain as the 200-DMA is near the current spot price.
The NZD/JPY surges higher for the second day consecutive day, as investors assess the last US inflation report that said the US economy reached the 7% threshold for the first time since 1982. That said, US stocks rallied as risk appetite improved. In the meantime, in the FX market, risk-sensitive currencies like the antipodeans advanced. At the time of writing, the NZD/JPY is trading at 78.50 as the Asian session begins.
NZD/JPY Price Forecast: Technical outlook
On Wednesday, the cross-currency pair was sideways within the 78.14-40 area, with no clear direction. Nevertheless, macroeconomic news improved the market sentiment, so the upward move was fundamentally driven but stalled due to technical reasons.
Once the US CPI headline crossed the wires, the NZD/JPY breached 78.40, edging higher though the rally stalled around 78.70, 25-pips above the 100-day moving average (DMA) around 78.44.
On Tuesday, in my previous article (read here), notes mentioned that “the NZD/JPY daily chart depicts an upward bias, as Tuesday’s price action broke above the 200-day moving average (DMA).” Nevertheless, the attempt towards 79.00 was rejected at around 78.70, leaving a candle with a long upper wick, indicating that buyers were rejecting higher prices.
To the upside, the first resistance would be the January 12 daily high at 78.70. A decisive break of the first ceiling level would expose a three-month-old downslope trendline around the 78.75-90 area, immediately followed by the previous-mentioned 79.00 figure.
Conversely, the first demand zone for NZD/JPY bulls is the 50-DMA at 78.39. A breach of the latter would open the door for lower prices. The next floor would be the 200-DMA at 78.16, followed by the 78.00 figure, and then the January 10 cycle low at 77.58.
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