NZD/JPY Price Analysis: A double-bottom in the daily chart targets 80.00

• The NZD/JPY trims some of its Monday’s gains, down 0.33%.
• Positive developments on the Covid-19 front increased risk appetite denting the Japanese yen prospects.
• NZD/JPY Price Forecast: The double-bottom in the daily chart targets 80.00.

The NZD/JPY retreats from monthly tops, trading at 78.05 during the day at press time. Early in the New York session, the market mood was upbeat, propelling the S&P 500 towards 4,800 to all-time highs. However, market conditions changed as the session progressed, with US equities finishing in the red, except for the Dow Jones Industrial.

Since Monday, the market has improved on the back of positive news on the Covid-19 front. Three studies, one in South Africa and two in the UK, showed that people vaccinated with at least two shots and who become infected with the Omicron variant were between 50% to 80% less subject to require hospitalization.

When the news crossed the wires, it was a green light for investors, which bought the dip, pushing equities worldwide to new highs. In the FX market, risk-sensitive peers gained versus the safe-haven status of the Japanese yen, until today, when a risk-off mood caused a dip, which could be viewed as an opportunity of opening fresh bets vs. the Japanese yen.

NZD/JPY Price Forecast: Technical outlook

The NZD/JPY daily chart shows a double-bottom formation. Furthermore, at press time, the “neckline” of the chart pattern confluences with the 200-day moving average (DMA) around the 77.96-78.03 range, which NZD bulls are likely to defend as the double-bottom targets 80.00.

To the upside, the NZD/JPY first resistance would be the 100-DMA at 78.32. A breach of the latter paves the way for further upside. The next line of defense for JPY bulls would be the 50-DMA at 79.00, followed by the double-bottom target at 80.00.