Pulls Back After Failure To Pierce 50-DMA

The formation of a bullish Harami candlestick pattern at the beginning of last week heralded an upswing towards the 50-DMA, but NZD/JPY faltered after a failure to breach that moving average. The rate last trades at Y77.90, a handful of pips higher on the day.

• A deeper sell-off past Jun 21 low of Y76.22 would shift bearish focus to the key Mar 24 low of Y75.63. The next layer of support is located around Y75.31, which represents the 23.6% retracement of the Mar 19, 2020 - May 27, 2021 rally. This Fibo level helped the rate form a base in mid-Feb and thus sustain the broader upswing.
• A break above the aforementioned 50-DMA, which intersects at Y78.52, would please bulls. The next topside target of note is at Y80.18, which represents May 27 high & the YtD peak.
• Coronavirus dynamics continue to draw attention, with Japanese officials vigilant amid an uptick in new cases in Tokyo, as the upcoming 2020 Olympic Games loom large. In New Zealand, officials have not yet found any new cases in the community, with Wellington set to remain under alert level 2 at least until the end of the day.
• The uptick in Japanese unemployment was a tad larger than expected, with headline jobless rate printing at 3.0% in May. Local retail sales data for the same month will be published shortly. Elsewhere, New Zealand's docket is headlined by an address from RBNZ Gov Orr.