New Zeeland dollar has appreciated during the last months in front of the Japanese yen. We can see on the chart a nice up trend. At a better look we can say that it is even an up channel. The thicker blue line is the trend’s line, the thinner blue line is a middle line which was respected by the price and the red thin line is the rejection line of the channel.
After a false breakout made in the beginning of April, the price rallied very fast touched the rejection line and made a new high at 86.43. After that got back to the trend line and made a new low at 80.49.
For the past two weeks NZDJPY has been consolidating in a rectangle pattern. The support is at 82.32 and the resistance sits at 84.87. As long as these limits are not broken we cannot say what the direction would be.
One of our scenarios is for the price to retest the thick trend line rally back to the resistance and maybe break it. One other would be for the price to break faster the resistance and rally to the middle line and touch 86.43. A less probable scenario would be for the NZD to drop and break the trend line and also the support of the rectangle.