NZDJPY jumped to a 6-week high of 76.28 earlier today, breaking above the Ichimoku cloud for the first time since April. Today’s sharp rally also pushed prices above the top of the upward trending regression channel that prices have been trading in for most of June.
RSI is rising and has yet to reach overbought levels so there is scope for further gains in the near term. The MACD histogram turned positive after today’s gains, further supporting the strengthening bullish bias.
Further gains could see prices test the 76.75 level – a previous resistance area. If prices manage to break above this level, it may generate enough upside momentum to target the 200-day moving average. Any attempt to move above the 200-day moving average would be significant as it could signal the end of the longer-term downtrend that started 12 months ago.
To the downside, immediate support comes at 75.60, while a drop back below the cloud and into the regression channel would put the 50-day moving average in focus. Failure to hold above the 50-day moving average at around 74.65 weaken the current positive bias.
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