#NZDJPY @ 85.5870 slumps to the lowest level in a week, extends previous pullback from yearly high. (Pivot Orderbook analysis)

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• NZD/JPY slumps to the lowest level in a week, extends previous pullback from yearly high.
• RBNZ announces 0.25% OCR hike, keeps peak rate forecasts unchanged.
• Retreat in yields, upbeat concerns about Japan manufacturers also weigh on prices.
• Risk catalysts are the key, RBNZ’s Orr eyed for immediate directions.

The pair currently trades last at 85.5870.

The previous day high was 87.31 while the previous day low was 86.4. The daily 38.2% Fib levels comes at 86.75, expected to provide resistance. Similarly, the daily 61.8% fib level is at 86.96, expected to provide resistance.

NZD/JPY stands on slippery grounds as it takes offers around 81.50, down more than 100 pips on a day, as the Reserve Bank of New Zealand (RBNZ) fails to offer hawkish surprise to the markets on early Wednesday.

RBNZ announces 0.25% increase to its Official Cash Rate (OCR), as expected, during May month monetary policy meeting. It’s worth noting that the RBNZ defends its cash rate peak at 5.5% and exert downside pressure on the NZD/USD prices.

Also read: Breaking: RBNZ hikes rates by 25 bps to 5.50% in May, widely expected

Apart from the RBNZ moves, the retreat in the US Treasury bond yields and recently upbeat concerns about Japan also weigh on the exotic pair.

That said, the US 10-year and two-year Treasury bond yields retreated from the highest levels since early March the previous day. On the other hand, “Business sentiment at big Japanese manufacturers turned positive for the first time this year and service-sector morale hit a five-month high, providing more evidence of an economy on the mend after a COVID-led recession,” per the monthly results of the Reuters Tankan survey.

Moving on, challenges to sentiment and the bond market moves can entertain the NZD/JPY pair traders while a press conference by RBNZ Governor Adrian Orr could offer immediate directions to the cross-currency pair. Should the policymaker manages to defend the hawkish bias, the New Zealand Dollar (NZD) may witness a corrective bounce.

Despite the latest retreat, a one-month-old ascending support line, near 85.15 by the press time, challenges the NZD/JPY bears dominance.

Technical Levels: Supports and Resistances

NZDJPY currently trading at 86.53 at the time of writing. Pair opened at 86.58 and is trading with a change of -0.06 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 84.96, 50 SMA 83.54, 100 SMA @ 83.61 and 200 SMA @ 84.33.

The previous day high was 87.31 while the previous day low was 86.4. The daily 38.2% Fib levels comes at 86.75, expected to provide resistance. Similarly, the daily 61.8% fib level is at 86.96, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 86.22, 85.86, 85.31
• Pivot resistance is noted at 87.13, 87.67, 88.03

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