NZDJPY is trending up with higher lows and higher highs inside a rising channel on its 1-hour chart. Price is testing the mid-channel area of interest and a break higher could put it on track towards the top.

However, 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 also seems to have found a ceiling at the 200 SMA dynamic inflection point, and turning lower could send it back to support around 64.00.

Stochastic is already dipping into the oversold region to signal exhaustion among sellers, and turning higher could confirm that buyers are returning. Volume remains subdued, though, and ADX is moving below to suggest a return in consolidation.

Risk appetite has been subdued these days as traders are focused on the historic drop in crude oil, signaling that investors are looking ahead to weaker demand conditions. Supply has been elevated while major oil producers are pumping more of the commodity leading up to the start of the output deal on May 1.

Meanwhile, demand is still capped while lockdowns on account of the coronavirus outbreak are in place. This could continue for more weeks or months, which could mean much weaker growth prospects for the global economy, thereby weighing on the higher-yielding Kiwi while lifting the safe-haven yen. Expectations of extensions for these quarantine measures could keep a lid on Kiwi gains.

Note, however, that quarterly CPI turned out stronger than expected for New Zealand and this could still keep the Kiwi supported in the meantime. Then again, any major pickup in risk aversion could spur a decline for the riskier currency. On the other hand, increased stimulus efforts from authorities could prop it higher.