NZDJPY is extending its sideways trading in the four-hour chart, trailing the lower bound of the Ichimoku cloud. The 20-period moving average (MA) is flatlining in the same region, providing additional support against downward attempts.
The momentum indicators further underline the neutral short-term picture, though with the RSI glued slightly below the 50 level and the MACD hovering just below zero, a downside break is more likely than an upside one.
Should NZDJPY face fresh selling pressure and slip below the key 0.69 level, the June swing low of 68.19 will be the next major support that could halt downside moves. A breach of this level would take prices within uncomfortable range of the 200-period MA, currently at 66.88. Failing this as well would risk shifting the positive medium-term outlook to a bearish one.
Alternatively, if the pair manages to bounce off the bottom of the Ichimoku cloud, a run towards the 50-period MA at 69.80 should be feasible. Overcoming this hurdle would then enable prices to crack above the cloud top, switching the near-term bias back to a positive one.
But unless buyers are able to make another push towards the 4-month peak of 71.60 scaled earlier in June, the bullish medium-term outlook would become increasingly in danger of turning neutral.
