NZDJPY Forex Technical Analysis – Aug 7, 2017

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NZDJPY is currently bouncing off the long-term range resistance at the 83.00 major psychological level, possibly putting it back on track towards testing support around 73.00 or at the mid-range area of interest around 78.00.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. Stochastic is also heading south to signal that selling pressure is still in play. However, the oscillator is already dipping into the oversold region to signal that Kiwi bears are tired and might let buyers take over.
The main event risk for this setup is this week’s RBNZ decision during which the central bank would likely keep interest rates on hold. Traders are also expecting a few dovish remarks since the latest batch of reports from New Zealand signaled a fall in dairy prices and overall inflation.
Meanwhile, the Japanese yen could be able to hold on to its gains as the BOJ didn’t sound as dovish as expected in their latest policy decision. In addition, potential dollar weakness on subdued tightening expectations could support the yen.
Keep in mind, however, that the latest NFP report turned out stronger than expected and provided some support for US bond yields, thereby weakening demand for the lower-yielding yen. US CPI readings are due later on this week and another batch of strong figures could continue to undermine yen strength.
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With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.