NZDJPY is pulling back to the broken resistance at the 79.00 handle, and this lines up with the 50% Fibonacci retracement level.

Price is currently finding some support around the 100 SMA dynamic inflection point, which is above the 200 SMA to confirm that bullish momentum is present. The gap between the indicators is widening to reflect strengthening bullish pressure.

RSI also appears to be turning higher to show that buyers have the upper hand.

However, stochastic is pointing down to show that selling pressure is in play, so a larger pullback is possible. The 61.8% Fib is at 78.78, and this may be the line in the sand for a correction. A break below this could mean that more losses are in the cards.

There are no major reports from both New Zealand and Japan this week, so this pair could be pushed around by changes in risk sentiment. The main event for the week could be the US NFP release, as another disappointing result could dash Fed tapering hopes.

In that case, traders could anticipate a longer period of low interest rates, which would then be positive for businesses and consumers. A larger than expected increase, however, could spur tapering speculations that could bring risk-off flows in.

A pickup in risk appetite would benefit the higher-yielding Kiwi while a return in risk aversion could be beneficial for the safe-haven yen. Traders continue to keep tabs on the pandemic and the rising number of cases in India that could prompt more global restrictions.

Keep in mind also that the RBNZ already shifted to a more hawkish monetary policy stance in last week’s statement while the Japanese economy is still facing a longer state of emergency on account of surging COVID-19 cases.