NZD/JPY Price Analysis: Bearish reversal cues emerge, buyers give up gains
- The daily chart signifies a bullish market; yet, the hourly chart shows hints of a short-term bearish reversal.
- The NZD significantly weakened during the American session and cleared daily gains.
- The hourly RSI dived from the overbought area near oversold terrain.
The NZD/JPY cleared all of its daily gains and fell by nearly 0.75% during the American session. Bearish clues emerge on the hourly chart, but the daily technical outlook remains somewhat bullish.
On the daily chart, the NZD/JPY Relative Strength Index (RSI) reveals its latest reading, slightly shifting towards a positive trend. The value is edging past the 50 mark after a period of predominantly being in negative terrain. However, with the latest RSI reading barely past 50, the momentum can still be seen as not strongly favoring the buyers.
NZD/JPY daily chart
On the hourly RSI reading fell on the negative side after being near 70. The MACD histogram has begun to print rising red bars, also suggesting a rising negative momentum.
NZD/JPY hourly chart
Regarding the overall trend, the NZD/JPY pair jumped above the 20-day SMA today, often serving as a bullish short-term signal. In addition, the pair stands above its 100 and 200-day Simple Moving Average (SMA), also flashing a long-term positive outlook.
In conclusion, based on both the daily and hourly trends, plus taking the position in relation to the SMA into consideration, the NZD/JPY shows signs of a potential shift from a bearish to a bullish stance in the immediate term. However, if the bulls hold the above main SMAs, the outlook will still be positive.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
