NZD/JPY has been quite impulsive inside the bearish trajectory recently which engulfed a series of previous bullish price action with ease. In light of downbeat economic reports from New Zealand, NZD has weakened notably against JPY in the process.
Recently, New Zealand Building Approvals report was published with a decrease to -10.3% from the previous value of -8.2% and ANZ Business Confidence also decreased to -50.3 from the previous figure of -44.9. As ANZ Business Confidence report is one of the leading indicator of the economic health on which future economic activities are based, the significant decrease in these meaningful reports was quite a blow for NZD in the process. Though there is no impactful news on the NZD side to be published today, NZD weakness is expected to continue further.
On the other hand, JPY has been quite positive amid the recent economic reports like Retail Sales which was published with better than expected result at 1.5% which was expected to decrease to 1.3% from the previous value of 1.7%. Today Tokyo Core CPI report was published with a slight increase to 0.9% which was expected to be unchanged at 0.8% but Unemployment Rate report was published with an increase to 2.5% which was also expected to be unchanged at 2.4%. Moreover, today Japan's Prelim Industrial Production performed worse than expected at -0.1% which was expected to increase to 0.3% from the previous value of -1.8%.
Meanwhile, despite the mixed economic reports from Japan today, the currency has maintained certain momentum of gains over NZD which indicates further bearish pressure to be observed in this pair in the coming days. Until New Zealand comes up with a strong figure or value in pending economic reports, JPY is expected to dominate in the pair for a while.
Now let us look at the technical view. The price has recently breached below 74.00 area and dynamic level of 20 EMA as well while continuing with the prevailing bearish trend in process. As there are no signs of any Bullish Divergence in MACD, the bearish momentum is expected to continue to push the price lower with target towards 72.50 support area in the coming days. As the price remains below 75.50 area, the bearish bias is expected to continue further.
SUPPORT: 72.50
RESISTANCE: 74.00, 75.50
BIAS: BEARISH
MOMENTUM: IMPULSIVE
