NZD/JPY Price Analysis: Rejected at the 200-DMA meanders around 77.60s

• The NZD/JPY extends its gains in the week, up some 1.49%.
• The market sentiment is upbeat on Covid-19 news from South Africa and Pfizer’s pill.
• NZD/JPY Technical Outlook: It has a downward bias, though a break of the 200-DMA could send the NZD/JPY up to 79.00

The NZD/JPY rallies for the second consecutive day, trims losses from December 16, trading at 77.63 as the Asian session begins, at the time of writing. The New York session ended with an upbeat market sentiment spurred by positive news in the Covid-19 front. US equities finished in the green, gaining between 0.74% and 1.21%, led by the heavy-tech Nasdaq. At press time, Asian equity futures eyes towards a higher open, as positive market sentiment get follow-through in Asia.

On Wednesday’s overnight session, the NZD/JPY seesawed around the 76.90-77.20 range in the Asian session. However, as the overlap between Asia and Europe kicked in, the NZD/JPY surged aggressively, printing a daily high at 77.89, a price level not seen since December 16.

NZD/JPY Price Forecast: Technical outlook

The NZD/JPY daily chart depicts the pair still in a downward bias, as the daily moving averages (DMAs) reside well above the spot price, slightly horizontal, and would be strong resistance to overcome for NZD bulls. The NZD/JPY surged aggressively on Wednesday, though the upward move stalled near the 200-DMA at 78.01, to then settling around current levels.

To the upside, the first resistance would be December’s 16 cycle high at 77.96. The breach of the latter would expose the 200-DMA at 78.01, immediately followed by the 100-DMA at 78.28

On the flip side, the first support would be the psychological 77.00. A clear break of that level would add downward pressure on the NZD/JPY, exposing key support levels. The next one would be the December 3 swing low at 75.95, followed by the July 20 swing low at 75.25.