The NZD/JPY pair on Friday faced selling pressure, causing it to drift towards the 20-day Simple Moving Average (SMA) at 95.70. This movement suggests that the cross might be entering a consolidation phase, limiting the buyers’ ability to maintain its upward momentum. The Relative Strength Index (RSI) on the daily chart has decreased to 53, indicating a moderation in buying pressure and a move away from overbought or oversold territory. The Moving Average Convergence Divergence (MACD) has also started to show rising red bars, signaling an increase in selling momentum and raising the possibility of extended consolidation or potential declines.
Although the NZD/JPY pair has seen a significant increase from around 91.00 to 96.00 since early May, the recent movement towards the 20-day SMA suggests that the consolidation phase may be in effect, putting a halt to the previous uptrend. The defense around the support level might weaken, leading to potential declines in the near future. Traders should closely monitor the RSI and MACD indicators for further clues on the direction of the cross in the coming days.
Overall, the Kiwi’s grip is weakening against the Yen as the cross navigates through a consolidation phase. The bearish stance is strengthening, potentially leading to a breach of the 20-day SMA support. Traders should exercise caution and closely monitor key technical indicators to determine the next move for the NZD/JPY pair. With the RSI pointing towards a moderation in buying pressure and the MACD signaling increased selling momentum, the cross could be at a critical juncture that may result in further declines if the support level is breached.
In conclusion, the NZD/JPY pair is currently facing selling pressure and is drifting towards the 20-day SMA, indicating a potential shift in momentum. The consolidation phase may restrict buyers’ ability to push the cross higher, leading to a possible breach of the support level. Traders should stay vigilant and closely monitor key technical indicators to gauge the direction of the pair in the upcoming trading sessions. As the bearish stance strengthens and selling pressure mounts, it is essential to stay informed and prepared for potential declines in the NZD/JPY pair.
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