NZD/JPY Price Analysis: Golden cross in the daily chart opens the door for 85.00 and beyond
- The NZD/JPY March rally has gained 8.48% in the month.
- NZD/JPY Price Forecast: A breach of the 85.00 mark would expose levels not seen since July 2015.
The New Zealand dollar extended its rally vs. the Japanese yen for the second time in the week, despite a downbeat market mood courtesy of tensions in Eastern Europe. As the Asian Pacific session is about to kick in, the NZD/JPY trades at 84.43 at the time of writing.
US equities finished Wall Street’s trading session with losses. In the meantime, the greenback traded firmly, as portrayed by the US Dollar Index rising 0.20% at 98.612, while the US Treasuries sell-off stalled, with yields down.
The NZD/JPY pair is a cross-currency pair traded mainly as pure market sentiment play. However, it appears to be decoupled from a positive correlation with the S&P 500. Since mid-February of 2022, the S&P 500 began sliding, as the US central bank turned hawkish, while the NZD/JPY began its 800 pip rally, from around 76.00 towards 84.00
Overnight, the NZD/JPY began on a higher note, around 84.00-30, reaching a daily low at 83.70. Late in the New York session, staged a rebound achieving a YTD high at 84.64, despite the negative divergence between NZD/JPY’s price action and the Relative Strength Index (RSI), a momentum indicator in the 1-hour chart.
NZD/JPY Price Forecast: Technical outlook
The NZD/JPY daily chart depicts the pair as upward biased. Furthermore, the 50-day moving average (DMA) at 78.12 just crossed over the 200-DMA at 78.04, forming a golden cross, which means the NZD/JPY is ready to make new highs unless a sudden market sentiment increases appetite for safe-haven peers.
With that said, the NZD/JPY’s first resistance would be the 85.00 mark. A breach of the latter would expose the April 2013 high at 86.41, followed by April 2014 at 89.92, and the 90.00 mark.
