- NZD/JPY pair has seen a pullback with some selling pressure emerging.
- Technical indicators suggest a weakening bullish outlook, with the RSI and MACD flattening.
- The pair has formed a strong resistance near the convergence of the 100 and 200-day SMAs.
The NZD/JPY pair has retreated from its recent highs, signaling a potential shift in momentum. In Thursday's session, the pair shed 0.40% to 91.30, and continues to side-ways trade but with some signs of bulls weakening.
The technical indicators are mirroring this shift. The RSI, which measures the strength of buying pressure, has declined to 56, indicating a weakening bullish sentiment. The MACD, which gauges the relationship between the pair's short-term and long-term moving averages, has flattened, suggesting a neutral outlook remains flat and green.
Important support and resistance levels need to be watched closely are seen at 91.30, 91.00, and 90.50. Resistance levels are located at 91.50, 92.00 (the convergence of the 100 and 200-day SMAs), and 92.30. The pair's price action is likely to fluctuate within these levels in the near term. The 20-day SMA remains as a critical support level on the downside, and its breach could intensify the selling pressure and strengthen the bearish momentum.
That being said, the price action will be determined by fundamentals as the pair continues to be stuck between the 20-day SMA and the 100 and 200-day SMA convergence. Investors should monitor a breach of these two boundaries.
NZD/JPY daily chart
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