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Technical Analysis – NZDJPY outlook remains bearish but bias is neutral

NZDJPY has been stuck in a range between 80.44 and 83.26 since it halted its April-July downtrend. The outlook remains bearish but there are some indications of extending its range-bound trading into the medium term.

Prices are below the moving averages and the Ichimoku cloud, suggesting ongoing bearish momentum. But the Tenkan-sen and Kijun-sen lines have begun moving sideways along the center of the recent range. The Ichimoku cloud is also starting to shift towards a sideways pattern, signalling a possible reversal of trend to a more neutral outlook. RSI is also looking neutral fluctuating close to 50.

The pair is likely to remain within a range if it does not stray too far from its current midpoint of around 81.80. A break above the top band at the July 29 high of 83.26 would take the pair above the 50-day moving average and into the cloud to neutral territory. If prices dropped below the July 16 support at 80.44, this would strengthen the downside bias, putting NZDJPY back onto a downtrend.

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