A technical candlestick pattern known as a doji is hinting at potential selling in the NZD/JPY currency pair just ahead of resistance at 83.60.  The level has been tested at least twice in the last 48 hours – with both attempts failing for at least a handful of pips.  But, with technical indicators hinting at overbought conditions, the next move lower is expected to correct back to as far as 82.50 in the medium term.

Notably, signal lines in the MACD oscillator continue to make lower highs – a trend that has been taking place over the last week and half.  The trend has been simultaneously occurring as price action continues to make higher highs – otherwise known as a bearish divergence.

Given the bearish outlook for the currency pair, we anticipate a short term correction back to 83.15, with a break lower through this level expediating the push towards 82.50.

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