The New Zealand dollar’s rate to the Japanese yen has been strengthening for 5 weeks. The increase in the current week has led the NZDJPY currency pair above the key resistance zone within 73.00. What is the scenario for the next weeks of 2020?
The NZDJPY weekly chart shows us a downward trend, with the price moving under the trend line running from its peak in 2014. The last test of this trend line took place in December 2018. If buyers keep up the momentum, there will be a chance to touch this resistance again this year.
On their way to the trend line, the bulls have already overcome the horizontal resistance within 73.00, but they still have a challenge to overcome the bearish gap from May this year, close to 73.60. The downward trend will be questioned after the closing of the week above the aforementioned trend line. Then buyers would open the way to resistance at 76.50.
Alternatively, if the price is kept below the trend line and returns to the resistance at 73.00, we could expect a downward correction. The key support in this scenario would be between 70.00 and 69.00.
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