After enjoying an upward ride for three days, the kiwi extended downward movement against the Japanese yen on Monday, taking the price to less than 92.10 ahead of the New Zealand trade balance figure which is scheduled for release in the late New York session. The pair did move higher during the early hours of Asian session and then halted rally due to a tough resistance around 92.61.
As of this writing, the pair is being traded around 92.48. Opened at 92.53, the pair is facing equal pressure from bears and bulls thus forcing the price to stay around its opened price. On downside, a support can be seen around 91.80, the psychological number. The said level has successfully stalled the price on various occasions since November. The next support can be noted around 91.46 (23.6% Fib level of the last drop from 93.97 high to 83.35 low) ahead of 89.90 (confluence of 50-Day SMA and 38.2% fib level) and then 83.35, the swing low of the last major dip, as demonstrated in the following chart.
On the upside, a major resistance can be noted around 93.30, the level that restricted the price many times during the last few days. Success in breaking this resistance will allow the pair to test 93.97, the 7-year high and the swing high of December 5. The pair may print a fresh multi-year high if it breaks the said resistance level.
The long-term bias is bullish because of higher lows on the daily chart, with a bit of choppiness. The bias will remain bullish as far as the support area 83.33 is intact.
New Zealand Trade Balance
The trade balance of New Zealand remained $-0.75B this November, as compared to $-0.11B in the same month of the year before, says the median projection of different analysts. Generally speaking, a positive balance is considered bullish for the kiwi dollar, thus a better than expected actual outcome will spur renewed buying pressure in the price of NZD/JPY.
Considering the overall technical and fundamental analysis, selling around the current levels could be a good strategy if the pair leaves a bearish pin bar or bearish engulfing candle on the daily chart.
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