NZD/JPY Price Analysis: Bullish momentum sustains, potential correction looms on overbought conditions

The daily chart flashes overbought signals but the overall trend favors the bulls.
Post achieving multi-year highs over 96.70, NZD/JPY shows a possibility for a healthy technical correction.
The pair has a strong support level at 95.00, a crucial point for buyers to defend to contain potential losses.

Patricio Martín FXStreet

On Tuesday's session, the NZD/JPY pair rose to 96.62 it highest level since July 2007. The outlook has shifted to cautious, with signs of a possible reversal in momentum as indicators flash overbought signals, but the overall bullish outlook remains intact.

Based on the daily chart indicators, the Relative Strength Index (RSI) consistently reflects overbought conditions standing deep in the overbought threshold. This hints at a potential downward price correction. Concurrently, the Moving Average Convergence Divergence (MACD) evidences continued positive momentum with its flat green bars.

NZD/JPY daily chart

Looking at the hourly chart, the RSI demonstrates lower strength compared to the daily view and has already started to edge downwards. In line with that, the MACD histogram suggests negative momentum as revealed by the presence of red bars.

NZD/JPY hourly chart

In the broader context, the NZD/JPY presently exhibits a strong uptrend, as displayed by its position above the 20, 100, and 200-day Simple Moving Averages (SMA). This indicates that the currency pair's short-term gains are exceeding both its medium and long-term averages.

As a correction looms, any downward movements that keep the pair above its SMAs could be considered corrective, with the first strong support seen at around 95.00.

NZD/JPY

Overview
Today last price	96.5
Today Daily Change	0.01
Today Daily Change %	0.01
Today daily open	96.49

Trends
Daily SMA20	94.13
Daily SMA50	92.5
Daily SMA100	91.78
Daily SMA200	90.24

Levels
Previous Daily High	96.54
Previous Daily Low	95.97
Previous Weekly High	96.15
Previous Weekly Low	95.08
Previous Monthly High	95.42
Previous Monthly Low	89.96
Daily Fibonacci 38.2%	96.32
Daily Fibonacci 61.8%	96.19
Daily Pivot Point S1	96.12
Daily Pivot Point S2	95.76
Daily Pivot Point S3	95.55
Daily Pivot Point R1	96.7
Daily Pivot Point R2	96.91
Daily Pivot Point R3	97.27

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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