NZD/JPY Price Analysis: Struggles at 86.00, tumbles amid a risk-off mood
- Despite a risk-off mood, the New Zealand Dollar recovered some ground vs. the Japanese Yen.
- The double-top formation in the NZD/JPY daily chart remains in play.
- Short term, the NZD/JPY is headed downwards, eyeing the 85.00 psychological figure.
The New Zealand Dollar (NZD) remains bid against the Japanese Yen (JPY) even though a risk-off impulse surrounds the financial market, except for the FX space, with risk-perceived currencies rising. That said, high beta currencies like the NZD are appreciating. Hence, the NZD/JPY is recovering, trading at 85.98, above its opening price by 0.42%.
NZD/JPY Price Analysis: Technical outlook
The NZD/JPY daily chart suggests a double top formation emerged of late, sparked by Monday’s plunge of more than 130 pips, driving the exchange rate towards its weekly lows of 85.42, reached on Tuesday. However, the cross-currency pair bounced toward its daily high of 86.29, and its later retracement below 86.00 could exacerbate a fall to the 200-day Exponential Moving Average (EMA) at 84.10, ahead of the November low of 83.84.
In the near term, the NZD/JPY 4-hour chart portrays the pair tested the 100-EMA around 86.17 three times before diving to the 200-EMA at 85.68. However, the NZD/JPY bounced to the daily pivot point at 85.94, shy of the 86.00 figure, which, once broken, could open the door for a re-test of the 100-EMA. But the Relative Strength Index (RSI) is in bearish territory, and possible deterioration in market mood suggests the path of least resistance is downwards.
Therefore, the NZD/JPY first support will be the 200-EMA at 85.69, which, once cleared, will send the pair diving to the S1 daily pivot at 85.52, followed by the S2 pivot at 85.04.
NZD/JPY Key Technical Levels
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
