NZD/JPY meanders around 85.50s after NZIER Business confidence, Japan’s PPI

• The NZD/JPY remains steady at around 85.50 amid a dismal market mood.
• Geopolitics and higher bond yields spurred risk aversion.
• NZD/JPY Price Forecast: A symmetrical triangle in an uptrend looms and, once broken, would target 88.86.

NZD/JPY is almost flat as the Asian Pacific session begins, gaining some 0.08%, though short of Monday cycle high around 86.04. At press time, the NZD/JPY is trading at 85.56.

Risk aversion, global bond yields rising, and Russo-Ukraine jitters weighed on the NZD/JPY

The market sentiment remains dismal, following the lead of US equities. Asian stock futures point to a lower open, while worldwide bond yields keep rising as global central banks tighten monetary conditions to tackle inflation. Additionally, the Ukraine-Russia conflict intensified, as reports point out that Russia could use chemical weapons, as Ukrainian President Volodymyr Zelenskyy stated early in the Asian session.

Zelenskyy added that Russia concentrates tens of thousands of soldiers for its next offensive near the Donbas regions. At the same time, the leader of the Donetsk People’s Republic claimed that the Russian forces have control of the Mariupol port.

The New Zealand docket featured the NZIER Business confidence survey, which showed that business confidence and demand conditions worsened in the first quarter of 2022, blaming the coronavirus pandemic.

On the Japanese front, March’s Producer Price Index (PPI) rose by 0.8% m/m, lower than the 0.9%, while the yearly reading showed that prices increased by 9.5%, higher than the 9.3% estimated.

NZD/JPY Price Forecast: Technical outlook

The NZD/JPY consolidated in the last eleven trading days in the 84-86.50 area. The daily moving averages (DMAs) reside below 80.39, with just the 50-DMA trending, while the 100 and the 200-DMA’s lie at 78.88 and 78.54, respectively. The Relative Strength Index (RSI), at 71.90, signals that the NZD/JPY upward move is overextended, as RSI is in overbought territory, meaning that the pair might be range-bound.

Nevertheless, a symmetrical triangle in an uptrend would break upwards, and the target would be 88.86. If the NZD/JPY breaks upward, the first resistance would be 86..00. A breach of the latter would expose April 5 daily high at 86.38, followed by the March 28 daily high at 86.95.

On the flip side, the NZD/JPY first support would be 85.00. Once cleared, the NZD/JPY first support would be 84.24, followed by 84.00.