NZD/JPY Price Analysis: Cross resilient above 20-day SMA, further upside limited
- The Kiwi gathers strength against Yen, staying comfortably above the 20-day SMA on Tuesday.
- Continuation of the consolidation phase is likely, with trading potentially framed between 95.00 and 97.00.
- After a sharp ascent in May, buyers are likely consolidating gains for possible further ascent.
On Tuesday, the NZD/JPY pair demonstrated resilience above the 20-day Simple Moving Average (SMA) at 95.90, with the pair inching closer to cycle highs near 97.00. The landscape indicates that the consolidation phase continues to hold sway, potentially limiting all upward movements of the cross past the mentioned cycle highs.
The Relative Strength Index (RSI) for NZD/JPY on the daily chart has escalated to 58 from 56.60, suggestive of an increase in buying momentum. Conversely, the Moving Average Convergence Divergence (MACD) continues to print red bars, insinuating a possible suppression of the bullish momentum and thereby corroborating the ongoing consolidation.
NZD/JPY daily chart
With buyers affirming presence above the 20-day SMA and indicators alluding to possible exhaustion, it elucidates the market's need to consolidate following the substantial surge observed in May. The ensuing trading sessions may continue to see the pair oscillate between the 95.00 level as a support and the 97.00 level as resistance, as the pair possibly stabilizes following recent gains.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
