NZDJPY has found support around 63.75 and resistance close to the 66.00 handle. Price is nearing the top of the range and might be due for another bounce off the top.

If so, the pair could fall back to support, and stochastic is suggesting that sellers could indeed take over. The oscillator is indicating overbought conditions and price could follow suit once it moves south.

Moving averages are barely providing strong clues at the moment as the indicators are simply oscillating to reflect consolidation. Volume remains subdued while traders await stronger market clues, but ADX is above 25 to suggest that trending market conditions could be in play.

A break past the range resistance could set off a climb that’s around the same height as the rectangle pattern or around 200 pips.

The RBNZ is gearing up to make its monetary policy decision on Wednesday, but no actual rate changes are eyed. Note, however, that data has been mostly upbeat for the first quarter and that the government has started lifting lockdown measures while the pandemic is being contained in the country.

Meanwhile, the yen is on weak footing on account of risk-on flows since the previous week. Traders have been focused on governments easing lockdown measures, which could then bring more business and consumer activity down the line.

There are no major reports due from the Japanese economy this week, so this pair’s movement could hinge mostly on NZD direction and overall market sentiment. A positive mood could keep the higher-yielding Kiwi supported while at the same time dragging the safe-haven yen down.

On the other hand, worsening headlines related to the COVID-19 outbreak might force the Kiwi to retreat. Note that China also has a couple of major reports due later in the week that could impact overall risk-taking.