NZDJPY has formed lower highs and found support at the 76.50 minor psychological mark, creating a descending triangle on its 4-hour time frame. Price looks ready for a test of resistance soon.

This lines up with the 77.50 minor psychological mark, which might be enough to keep gains in check. Then again, the 100 SMA is holding as dynamic resistance at the moment.

The 100 SMA is still above the 200 SMA, though, so the path of least resistance is to the upside. Then again, the gap between the indicators is narrowing to reflect weakening bullish momentum and a potential bearish crossover.

If that happens, more sellers could hop in and push NZDJPY back down to the triangle support or perhaps go for a break lower.

Stochastic is already turning lower from the overbought zone to signal that sellers are taking over while buyers take a break. The oscillator has plenty of room to move down before reaching the oversold region to signal exhaustion among sellers.

RSI also seems to be turning lower, although the oscillator still has some room to climb before reaching the overbought area.

The RBNZ decision is coming up, and market expectations are for the central bank to hike rates by 0.25%. Policymakers have no reason to delay their tightening decision this time, as growth and inflation have beat expectations recently.

The market focus could turn to expectations for another interest rate increase in their next statement, and this might drive Kiwi price action. Dousing hopes that they will have back-to-back monthly hikes could mean some downside for New Zealand’s currency while confirming that another tightening move is in the cards could spur more gains.

Meanwhile, there are no major reports from Japan, so the yen could function mostly as a counter currency or take cues from overall market sentiment.