NZD/JPY Price Forecast: A bullish-engulfing candle pattern prepare bulls attack towards 81.00
- NZD/JPY bounced off monthly lows, reclaimed the 80.00 figure.
- NZD/JPY extends its advance amid risk-off market sentiment that could cause NZD weakness.
- NZD/JPY: Two-technical bullish signals open the door for further upside in the pair.
The NZD/JPY bounced off monthly lows around 79.70s, climb as the Asian Pacific session begins, is trading at 80.49 during the day at the time of writing. The market sentiment is mixed, as the S&P 500 and the Nasdaq rose to new all-time highs. However, Asian equity indices futures failed to gain traction, except for the Japanese Topix, the only advancing some 0.38%.
On Thursday, the NZD/JPY began the day near the monthly lows, but good macroeconomic data coming out of New Zealand spur an upward move, as the data released increased the odds of a 50 basis point rate hike by the Reserve Bank of New Zealand.
Nevertheless, the rally stalled around 80.40 in the New York session, as the pair dipped 30 pips without any known reason, which also caused a fall in US Treasury yields. However, towards the end of the New York session, the pair reclaimed the 80.40 area.
NZD/JPY Price Forecast: Technical outlook
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The daily chart shows that the NZD/JPY is trading above the May 27 high at 80.17, previous resistance that turned support. Also, a bullish-engulfing candle pattern composed of two candles just formed, adding more fuel to the upward bias. Additionally, the daily moving averages (DMA’s) are below the spot price, so there are two technical bullish signals.
For NZD/JPY bulls to accelerate the uptrend, they would need a daily close above the November 16 high at 80.65. In that outcome, 81.33 would be the first resistance. A breach of the latter would expose 82.20, near the year-to-date high, which lies around 82.50.
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.
