NZDJPY corrects below the 20-day simple moving average (SMA) after slightly breaking above the previous high from July 22 of 2019 of 73.23, putting the bigger positive picture under pressure.
The short-term oscillators suggest that the negative momentum is strengthening. The MACD, although deep in the positive region, is falling below its red trigger line. Moreover, the downward sloping RSI has reached its neutral mark, while the %K accelerates below its %D line. Worth mentioning is the nearing of a bullish cross of the 200-day SMA by the 50-day one, which may warrant some caution for a move back to the upside.
If sellers continue to drive the pair lower, the first obstacle could be the fresh low of 71.71. Overrunning this, a tougher barrier at the swing low from December 10 at 70.86 – where the 200- and 50-day SMAs look to overlap – may halt the drop towards another support region from 70.25 down to the 70.00 handle.
If buyers retake control and push above the 20-day SMA currently at 72.20, the 73.00 resistance hurdle could be next to test the climb. Following, the gap from May 2019 of 73.45 to 73.60 – which encompasses the eight-month high of 73.52 – could be next to restrict further gains towards the 74.58 and 75.94 highs of April 30 and 15 from 2019 respectively.
Summarizing, the short-term bias appears negative and a break below 71.71 would reinforce it. However, if the price remains above 70.86 and breaks above the gap, this could signal that the positive picture could endure a while longer.
