NZDJPY managed to cross the support-turned resistance bar, which kept bullish actions in check from July 2019 onwards, and peak at a 21-month high of 75.28 on Thursday.
At the same time, the pair has also overcome the 200 simple moving average (SMA) in the weekly chart at 73.90 and closed clearly above the 61.8% Fibonacci of the 2017- 2020 long-term down leg at 74.55, signaling that with those key barriers out of the way, new buyers could join the market.
Still, a pullback after a strong rebound cannot be ruled out in the short run, especially if the price has already closed above the upper Bollinger band and the RSI has entered the overbought territory. In this case, the resistance line could immediately resume its supportive role along with the 61.8% Fibonacci of 74.55, while slightly lower, a break below the blue Kijun-sen line and the 20-day SMA (middle Bollinger band), both around 73.90, may confirm another negative extension towards December’s low of 72.70.
On the upside, the bulls may face a tough battle somewhere within the 75.88 – 76.60 restrictive zone last active in the first half of 2019 before challenging the 77.00 number.
In brief, NZDJPY is looking cautiously bullish in the daily chart as the pair strengthens in overbought waters, with immediate resistance and support eyed around 75.88 and 74.55 respectively.
