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NZD/JPY Price Analysis: Falls to 84.40 as RBNZ inflation forecasts fall

Alina Haynes

Aug 08, 2022 11:55

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The NZD/JPY pair surpassed the immediate hurdle of 84.62 during the Asian session, but has since retreated back into the woods due to an unexpected decline in Reserve Bank of New Zealand (RBNZ) inflation forecasts. The economic data has been provided at a rate of 3.07 percent, which is less than the previous rate of 3.29 percent. The cross has exhibited a bullish open-drive session, in which the asset begins rising from the very first tick of the session. On a broader scale, the asset has broken to the upside from the consolidation created between 83.50 and 84.07 dollars.


On an hourly scale, the asset surpassed the downward-sloping trendline drawn from the 20 July high at 86.60, but it has since retreated. In addition, the cross is finding support near the 50 percent Fibonacci retracement level of 84.32 (which is located between the 20 July high of 86.60 and the 2 August low of 82.14)


At 84.00 and 84.11. respectively, the asset has surpassed the 50-period and 200-period Exponential Moving Averages (EMAs). Notable is the fact that the 200-EMA is selling for more than the 50-EMA, indicating that purchasing interest is exceptionally strong.


In addition, the Relative Strength Index (RSI) (14) has moved into the zone of 60.00-80.00, enhancing the upward filters. A break over Monday's high of 84.72 will propel the asset to the 61.8 percent Fibo level at 84.90, followed by the high of July 27 at 85.65.


In contrast, yen bulls could gain impetus if the cross falls below the 50-day exponential moving average (EMA) at 84.00. The asset will fall to Thursday's low of 83.46 and the 23.65 Fibonacci retracement level of 83.19 should a similar event occur.