NZD/JPY bounces at 50DMA, reclaims 80.00 level ahead of RBNZ policy announcement

• NZD/JPY bounced at its 50DMA just under 79.50 to move back to the 80.00 level on Tuesday.
• Trade will be consolidative now ahead of the RBNZ rate decision.
• NZD/JPY has been falling within the confines of a bearish trend channel throughout November.

NZD/JPY rebounded from its 50-day moving average just under 79.50 on Tuesday and is now trading back at the 80.00 level, where it trades higher by about 0.2% on the day. Trade will likely be subdued in the coming hours ahead of the RBNZ releasing their latest monetary policy decision at 0100GMT on Wednesday, which will then be followed by a press conference with Governor Adrian Orr at 0200GMT.

NZD/JPY has been falling within the confines of a bearish trend channel throughout November, with the pair is now down more than 2.0% on the month. Tuesday’s modest rebound has not seen the top of this bearish trend channel threatened. A clean break above Monday’s highs at 80.17, beyond last week’s high at 80.66 and then past the 21DMA at 80.77 would be needed before technicians grow confident that the pair can recover back to early November highs above 82.00.

A hawkish outcome from the RBNZ in the form of a larger than expected 50bps rate hike, or hawkish rate guidance further out, or both, may be enough to spur such a move. Failing that though, if the bank goes ahead with a widely anticipated 25bps rate hike and fails to inspire the bulls with its rate guidance, NZD/JPY is likely to remain locked within the confines of the recent bear trend.