NZD/JPY Price Analysis: Persistent downtrend extends, bears test critical supports
- NZD/JPY continues in its relentless sell-off, propelled by bearish technical indicators and dwindling volume.
- The RSI remains in oversold territory, indicating potential exhaustion of the prevailing down move.
- The MACD maintains its bearish alignment, aligning with the general trend.
The NZD/JPY pair remains entrenched in its bearish trajectory, giving no respite to the bears as it approaches critical support levels. This persistent decline has extended across multiple trading sessions, with the NZD/JPY shedding over 10% of its value since its highs in recent weeks. Notably, the pair has breached the 89.00 psychological level and settled well below the 200-day Simple Moving Average (SMA).
On Monday, the NZD/JPY fell by 1.60% to 86.00, reinforcing the sellers' dominance but cleared losses which plunged the index to a low of around 83.00, a critical support level. While the pair has been relentlessly declining, technical indicators like the Relative Strength Index (RSI) continue flashing oversold conditions are approaching. Such conditions may hint at a potential pause in the downtrend. Currently, the RSI resides around 20, signaling a prolonged period of selling, though a potential trend reversal remains a possibility.
NZD/JPY daily chart
Navigating the depths of its descent, the pair is hovering near the 86.00 support level. Should this level fail to hold, further support awaits at 85.50 and 85.00, representing potential areas for a temporary reprieve. Conversely, resistance levels are positioned at 89.00 and 90.00, with the latter coinciding with the 200-day SMA.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
