What makes us believe that the current uptrend will be sustained is a combination of several patterns, technical indicators as well as Gann and Fibonacci analyses. Along with the falling wedge, an Andrew's Pitchfork has been broken to the upside as well. The Pitchfork parallels failed to hold the rate beneath as well, leading to an environment in which we see is irrelevant for future movements. Additionally, the pair broke the descending channel of 2016 which contained movements of similar volatility.
Monthly Chart
© Dukascopy Bank SA
Due to high uncertainty in currency markets, the Yen has gained value quite sharply since the breakout occurred, therefore, although we stand in favour of an uptrend, the motion should continue a little flatter than the current rally – and there is technical proof for that. First of all, the pair has just overstepped the 38.20% Fibonacci retracement of the latest fall and 100-week SMA confluence and some hitches should be expected before the rate continues its way north. Secondly, we have identified an area of significance at 82.63/83.10 which will be relevant until late December, meaning that a consolidation of at least some flatness could come up next. The area's strength stems from a latest fall midpoint – Fibonacci Fan arc and Gann angle and bolstered by the 200-day SMA and November 2015 high. Depending on the angle of the Fan Arcs, the timing of the area could extend into early January.
4-Hour Chart
© Dukascopy Bank SA
The four-hour chart shows even more proof that a correction might occur at least to some extent as we draw a Pitchfork. The pair has slightly overstepped the upper boundary of the indicator, as well as that of a junior channel up. The development indicates that this week could be corrective and will lack bullish momentum.
Aggregate Technical Indicators
© Dukascopy Bank SA
In addition, the rate is currently dashing through a red Ichimoku cloud and is on the verge of breaking the upper resistance. Even though NZD/JPY has built up enough bullish potential to do that, it could steal some momentum and decrease the steepness of the slope. However, with the multitude of fundamental releases bound to shake the pair on Wednesday, NZD/JPY could make some false breakouts before markets calm.