NZD/JPY traded higher today after it hit support near the 69.55 level. Overall, the pair has been trading within a sideways range between 68.95 and 70.00 since October 18th, and now, it appears to be getting closer to the range’s upper end again. That said, until we see a clear break above that hurdle, we will not take the bullish side. As long as the rate continues to trade between the aforementioned bounds, we will stay sidelined.
As we already noted, we prefer to wait for a decisive move above 70.00 before we get confident on more upside extensions. Such a move could initially pave the way towards the 70.25 area, which is marked as a resistance by the inside swing low of June 18th. If the bulls are not willing to stop there, then a break higher may see scope for extensions towards the high of August 2nd, at around 70.50.
Taking a look at our short-term oscillators, we see that the RSI lies above 50 and points up, while the MACD sits above both its zero and trigger lines, pointing north as well. Both indicators suggest upside speed, but we repeat again that a break above 70.00 is the move that would make us turn our eyes to the upside.
Now, in case the rate dips back below 69.55, we would take this as a sign that traders want to keep this pair range-bound for a while more. The slide may continue towards the 69.20 barrier, the break of which is possible to open the path towards the lower end of the pre-discussed range, near 68.95.
