NZDJPY is pulling back from a steady rally after recently busting through the resistance around the 66.50 minor psychological mark. The Fib retracement tool shows where more buyers might be waiting.

The 38.2% Fib is holding as support for now, but a larger pullback could reach the 61.8% Fib that’s closer to the broken resistance. The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that support levels are more likely to hold than to break. However, price has dipped below the 100 SMA dynamic inflection point as an early indicator of bearish pressure.

RSI is starting to pull up from the oversold region to signal that buyers might be ready to return from here. Similarly stochastic looks ready to head north so NZDJPY could follow suit as buyers take over. If any of the Fibs are able to keep losses in check, price could recover to the swing high at 71.60 and beyond.

New Zealand is due to release its GDP later in the week and a contraction is eyed. However, the economy has already emerged from the lockdown so traders might be inclined to brush any downbeat results aside and focus on how the economy is starting to recover.

Meanwhile, the BOJ decision could have a bigger impact on this yen pair as the central bank could boost its stimulus efforts. Then again, risk appetite is also a huge factor and traders appear to be in a cautious mood these days.

Note that Fed head Powell has a speech coming up and that the previous Fed statement warned that it will be a long road to recovery. Repeating these downbeat views could mean more downside pressure for riskier assets like the Kiwi versus the lower-yielding yen.