The NZD/JPY currency pair remains firm above the 86.00 level, preserving its bullish structure that has been steadily evolving since the pair marked a yearly low at 79.81 on April 9. The cross has been exhibiting a classic technical progression of higher highs and higher lows, which continues to affirm the prevailing uptrend in the pair’s broader price trajectory.
At the time of writing, NZD/JPY is trading unchanged at 86.13, following a modest 0.24% gain on Monday, reflecting a cautious but evident risk-on market mood during the early hours of Tuesday’s Asian trading session. Vestronmix’s team of brokers breaks down the topic in a straightforward, informative article.
Bullish Momentum Since April’s Low
The sustained rally from April’s 79.81 bottom marks a clear trend reversal, with price action firmly establishing a bullish channel. The 86.00 psychological level has been recaptured and held, indicating that bullish sentiment is well entrenched, as traders continue to bet on strength in the New Zealand Dollar (NZD) relative to the Japanese Yen (JPY).
Technical formations underscore this momentum: the creation of successive higher swing highs and higher swing lows points to strong underlying buying interest. This structure signals an orderly and healthy rally, rather than an overextended spike.
Technical Indicators: RSI and Ichimoku Cloud
The Relative Strength Index (RSI) has risen past the neutral 50 mark, a positive signal supporting the ongoing uptrend. However, RSI readings remain moderate, suggesting the bullish move may consolidate in the near term unless reinforced by a new fundamental or technical catalyst.
Meanwhile, the Ichimoku Cloud, a comprehensive trend-following indicator, adds weight to the bullish outlook. Price action continues to hover above the Kumo, indicating supportive sentiment. The Kumo top at 84.21 and the Senkou Span B at 83.77 serve as layered support zones, fortifying the current price structure.
Immediate Resistance Levels: 87.01, 87.73, and 89.70
For bullish continuation, the NZD/JPY pair must decisively break above the 87.01 high from May 29. A close above this threshold would confirm further upside potential and attract additional long positions.
Beyond 87.01, the next resistance lies at 87.73, corresponding to the May 13 swing high. A clean breach above this level would likely open the door to test the year-to-date (YTD) high of 89.70, last seen earlier in the first quarter.
A move toward 89.70 would require sustained risk appetite across markets and ongoing JPY weakness, which could be fueled by divergence in monetary policy expectations between the Reserve Bank of New Zealand (RBNZ) and the Bank of Japan (BoJ).
Key Support Levels: 84.61, 84.21, and 83.77
On the downside, the May 22 swing low at 84.61 stands as the immediate technical support level. A breakdown below this area would undermine the short-term bullish bias and expose the pair to the upper boundary of the Ichimoku Kumo at 84.21.
If selling pressure deepens further, the next logical support comes into play at 83.77, marked by the Senkou Span B, a longer-term equilibrium level within the Ichimoku system. A close below these levels would neutralize the bullish structure and potentially reintroduce a corrective bias.
Broader Sentiment and Macro Outlook
The NZD/JPY pair is also sensitive to global risk sentiment, as the New Zealand dollar tends to benefit from positive risk environments, while the Japanese yen is traditionally a safe-haven asset. The pair’s Monday advance, albeit minor, reflects improving risk appetite, likely due to easing global financial conditions or equity market gains.
Central bank divergence is another key factor. The RBNZ has remained relatively hawkish, with inflationary concerns lingering, while the BoJ continues to maintain an ultra-loose monetary stance. This contrast in policy direction supports NZD strength over JPY, which further justifies the ongoing upward bias.
However, any unexpected escalation in geopolitical tensions or a sharp shift in U.S. Treasury yields could swing the pendulum back toward JPY strength, introducing volatility into this otherwise steady trend.
Conclusion
The NZD/JPY currency pair has carved out a resilient bullish path above 86.00, with an intact technical structure and favorable macro undercurrents. While near-term consolidation is possible, especially given the subdued RSI momentum, the overall bias remains firmly upward unless a breach of critical support levels occurs.
As long as 84.61 holds and buyers manage to reclaim 87.01, the bullish trend will likely continue toward 87.73 and potentially the YTD peak at 89.70. With the prevailing trend supported by fundamentals and technicals alike, NZD/JPY continues to be a currency pair to watch in the current trading landscape.
