NZDJPY has formed lower highs and found support at the 90.20 mark, creating a descending triangle on its hourly chart. Price is currently testing resistance and could be due for a dip back to the triangle support.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that resistance is more likely to hold than to break. Price is trading above the moving averages, though, so these could hold as dynamic support moving forward.

Stochastic is still heading down, though, so there could be some selling pressure left. RSI is also on the move down and has some ground to cover before reaching the oversold region to indicate exhaustion among sellers, so price could keep following suit.

Still, a break above the triangle top around 91.15 could set off a climb that’s the same height as the triangle pattern or roughly 100 pips.

NZDJPY could take cues from New Zealand’s CPI release, which is slated to show a slightly faster increase in headline inflation for Q3 at 0.5% versus the previous 0.4% uptick. However, weaker than expected results could keep traders wary of further RBNZ easing, which could bring fresh downside for the Kiwi.

On the other hand, an upside surprise in the quarterly or annual figures could dash hopes of further RBNZ cuts in the coming months, lifting the Kiwi across the board. A return in risk-taking spurred by easing geopolitical tensions could also prove more bullish for NZD.

The yen could be on weak footing if risk appetite weighs on safe-haven demand while jawboning among Japanese officials could prevent further yen gains. After all, policymakers are wary of excessive FX moves and are monitoring speculative trading activity to limit yen rallies.