In the currency market, the NZD/JPY pair faced a downward spiral on Friday, dropping to 87.48 and thereby prolonging its weekly losses. The persistent selling pressure has kept the pair firmly in a bearish grip, showing no signs of bouncing back as it breached crucial support levels earlier in the week.
Technical analysis paints a rather gloomy picture for the pair. The Relative Strength Index (RSI) is edging dangerously close to oversold conditions, which indicates that the selling has been intense and continuous. This situation could potentially trigger a correction in the near future. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator also showcases unwavering bearish momentum, with its steady display of red bars underlining the significant risks of further downward movement.
Should the bulls aim to wrestle back control, it would be essential for the NZD/JPY pair to climb back above the 88.00 level and subsequently attempt a test of the 89.00 area. However, until there’s a clear confirmation of a reversal, the pair remains vulnerable to additional declines. In the immediate term, the price could target the 85.00 – 86.00 range.
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