NZD/JPY Price Analysis: Probes a seven-month resistance trendline around 77.40

• The NZD/JPY extends its three-day rally amid risk-on market sentiment.
• A seven-month-old downslope trendline around 77-30-50 would be difficult resistance for NZD bulls.
• NZD/JPY Price Forecast: It has an upward bias, though it needs a sustained break from a seven-month-old downslope resistance trendline.

As the Asian Pacific session begins, the NZD/JPY starts in the right foot up some 0.49%, trading at 77.40 during the day at the time of writing. The equity markets in New York ended in the green, reflecting the positive tone in the financial markets. Also, major Asian stock indices point towards a positive open, carrying on some of Wall Street’s sentiment.

On Wednesday, the NZD/JPY pair remained subdued throughout the Asian and the early European sessions, within the 76.70-77.20 range. However, as American traders got to their desks, the risk-sensitive New Zealand dollar rallied from 76.65 to 77.55.

NZD/JPY Price Forecast: Technical outlook

The NZD/JPY has an upward bias, though it faces strong resistance at a seven-month-old downslope trendline around 77-30-50, which would be a problematic resistance area to overcome. Despite the abovementioned, the “spark” for NZD bulls to break to the upside could be that the 50-hour simple moving average (SMA) is about to cross over the 200-hour SMA, forming a golden-cross, which in this case, would propel the New Zealand dollar upwards.

In that outcome, the NZD/JPY first resistance area would be the R1 daily pivot level at 77.70. A breach of the latter could send the pair towards the 200-day SMA, at 78.07, immediately followed by the 100-day SMA at 78.26.

On the other hand, failure to break the trendline would exert downward pressure on the NZD/JPY pair. The first support would be the central daily pivot at 77.20, followed by the confluence of the 50 and the 200-hour SMA’s around 77.00, which could be challenging support to break. Nevertheless, a break of the latter would expose the S1 daily pivot at 76.85.