Forex Trading, News, Systems and More

NZD/JPY Price Analysis: Bulls add gains and indicators reach overbought conditions

  • The positive outlook on the daily chart improved but bulls aren’t yet in command.
  • the RSI was seen above 70 in recent hours, which may lead to a consolidation.
  • To prevent any potential losses, the bulls must defend the key SMAs.

In Tuesday’s session, NZD/JPY is trading at 91.36, registering an uptick of 0.74%. Despite some signals of a consolidation incoming, the market sees dominance by buyers, which leads to a broader bullish outlook. Ahead of the Asian session, the pair may correct overbought conditions on the hourly chart and see some red.

On the daily chart, the NZD/JPY pair posts positive momentum following a shift from the negative territory. The Relative Strength Index (RSI) now sits in the positive territory at 52 while the Moving Average Convergence Divergence (MACD) red bars recede, signaling a potential decrease in negative momentum.

NZD/JPY daily chart

Transitioning to the hourly chart, the NZD/JPY pair displays a stronger positive trend. The RSI enters the overbought territory due to consistent readings above 70. Sharp green bars in the MACD histogram signify strong positive momentum over the past few hours, suggesting buyers dominate the market for now. An RSI above 70 suggests an overextended buying momentum which typically leads to a downward consolidation

NZD/JPY hourly chart

In conclusion, both daily and hourly analyses point to a bullish outlook for the NZD/JPY pair. Traders should monitor the MACD for continued red bar reduction or a shift to green bars, and the RSI to see if it remains within or moves away from the overbought territory in the hourly chart. These data points would suggest a potential price reversal or continuation, respectively.

Regarding a Simple Moving Average (SMA) analysis, despite the bears gaining ground and pushing the pair below the 20-day Simple Moving Average (SMA), the pair remains above the 100 and 200-day SMAs. This pattern suggests that the bulls maintain control of the overall trend.