After failing to move towards August lows, NZD/JPY reversed to the upside on October 2nd and is now knocking on the door of its key resistance barrier, at 69.70, marked by the high of September 12th. Even if the rate doesn’t break that barrier straight away, but instead corrects slightly lower and as long as it continues to balance above its short-term upside support line drawn from the low of October 9th, we will stay positive.
As mentioned above, in order to get comfortable with further upside, a break of the 69.70 zone is needed. Such a move would lift the rate above September’s highest point, which might attract more buyers into the game. We will then examine the next potential resistance obstacle at 70.08, a break of which could send the pair to the 70.57 area, marked by an intraday swing high of August 1st. The rate might stall around there, or even correct slightly lower. But if it remains above the psychological 70.00 hurdle, we will stay positive and aim for higher levels. If NZD/JPY makes a strong comeback to the 70.57 obstacle and eventually breaks it, the next resistance area to consider is the 71.25 mark, which is the low of August 1st.
Our oscillators, the RSI and the MACD, are somewhat in support of the upside. The RSI is above 50 and continues to move towards the 80 mark. The MACD is well above zero and also points to the upside, by sitting fractionally above its trigger line.
On the other hand, in order to examine lower areas, a break of the short-term upside support line is needed. This could trigger a change in the short-term trend and more sellers may join in. We will then target the 67.84 hurdle, a break of which might send the pair to the 67.20 area, marked by the low of October 9th.
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