NZD/JPY begins week on its back foot in thin markets for Chinese New Year

• NZD/JPY begins week trying to close bearish gap.
• Volatile but rangebound action likley to continue.

NZD/JPY is trading up on quiet markets trying to close the small gap that opened the week, and the pair currently trading near 78.50 on quiet markets with China's institutions dark to celebrate Chinese New Year.

With little of note on the release radar for New Zealand, the focus will turn to macro themes, with analysts at ANZ warning that a softening in the NZ housing market via a crimping in housing prices will dampen spending activity growth going forward, as households look to replenish their rainy day funds following a deterioration in household savings in recent years.

February is shaping up to a down month for NZD/JPY, with the month marked by swings in volatility, with closing prices largely consolidating within the week's range, excluding a brief mid-week spike to a two-month low of 77.63. With thinning prospects for the Kiwi in the long-term, and the Yen's strength facing downward pressure from the Bank of Japan's constant rhetoric mill, the consolidation that was the hallmark of the pair in 2017 is set to continue going foward. 

NZD/JPY Technicals

Rough support for the pair is priced in at 78.30, 78.10, and 77.70, while a bullish push will face a resistance zone from 78.80 to 79.20. Daily candles show the pair in bearish consolidation, with price continuing to spin below the 200-day SMA, and a recent bearish crossing of the 34-EMA will provide encouragement to the short side as the candles continue to roll.