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NZD/JPY Outlook: New Zealand Dollar Decline Resuming?

NZD/JPY Outlook: New Zealand Dollar Decline Resuming?

2019-11-06 05:21:00
Ilya Spivak, Sr. Currency Strategist
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NZD/JPY TRADING Strategy: BEARISH

  • New Zealand Dollar may be ready to resume downtrend vs Yen
  • Negative RSI divergence hints at topping near the 70.00 figure
  • Long-term chart setup implies cope for substantial losses ahead

Check out our Q4 Japanese Yen forecast to see what will drive the price trend through year-end!

The New Zealand Dollar may be preparing to resume the downtrend started in December 2018 against the Japanese Yen. Acute negative RSI divergence has emerged on a test of support-turned-resistance in the 69.69-70.27 area, warning of ebbing upward momentum. This might prove to mark a swing top.

In order to be actionable, the setup needs to be confirmed with a break below rising trend support guiding the Kiwi Dollar’s latest upswing through October. A daily close below that would set the stage to retest the 66.67-94 support shelf. Invalidating bearish cues needs a close above falling trend resistance, now at 71.19.

New Zealand Dollar vs Japanese Yen price chart - daily

Daily NZD/JPY chart created with TradingView

A look at the weekly chart suggests ample scope for downside progress. NZD/JPY broke a nine-year uptrend in mid-2018. That has been followed by a decline that most recently cleared long-standing resistance-turned-support in the 68.89-69.72 region.

The way forward may be choppy from here if prices’ last foray into this area – from October 2009 to December 2012 – is any indication. Nevertheless, the bias seems decidedly bearish, with relatively little heavy-duty support on the horizon until are within striking distance of the 60.00 threshold.

NZD/JPY Outlook: New Zealand Dollar Decline Resuming?

Weekly NZD/JPY chart created with TradingView

NZD/JPY TRADING RESOURCES

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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