NZDJPY has been moving sideways, bouncing off support around the 78.00 major psychological level and resistance at 78.85. Price just got rejected on its test of the resistance and could be setting its sights back on support.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is still to the upside. In addition, the 100 SMA appears to be keeping losses in check at the moment since it lines up with the mid-range area of interest.
Stochastic is on the move down to show that sellers are still in control of price action. However, the oscillator is nearing the oversold area to show that buyers might be ready to get back in the game soon.
The latest RBNZ Financial Stability Report reflected lower risks in the housing sector as price pressures are reportedly abating. The report also acknowledged improving global financial conditions. New Zealand is due to release its quarterly overseas trade index next and a 4.0% increase is eyed.
As for the yen, Japan is set to release its capital spending figure and might show a 3.9% increase, slightly higher than the previous 3.8% figure. The final manufacturing PMI is also lined up and no changes to the initial 52.0 figure is expected.
By Kate Curtis from Trader’s Way