NZD/JPY traded higher yesterday after hitting support at 83.35, a zone that acted as a key support in the past as well, between Apr. 26 and May 6. Overall, the pair continues to print higher highs and higher lows above the upside support line drawn from the low of May 12, and thus, we will consider the short-term picture to be positive.
We believe that the bulls are likely to stay in charge and perhaps soon challenge the 84.85 barrier, near the peak of May 4. If they don’t stop there, we could see them pushing for the high of Apr. 28, at around 85.40, which could carry larger extensions, perhaps towards the 86.60 territory, marked by the inside swing lows of Apr. 20 and 21.
Shifting attention to short-term oscillators, the RSI broke above 70 and kept pointing up, while the MACD lies above its zero and trigger lines. Both indicators detect strong upside speed and support the notion of further advances in this exchange rate.
To turn our gaze to the downside, we would like to see an apparent dip below 82.80, a territory that provided resistance between May 23 and 26. This could also confirm the break below the aforementioned upside line and allow declines towards the low of May 24, at around 81.30. If the bears are unwilling to stop there, we may see them extending their dive towards the low of May 19, at around 80.50.