FxWirePro: NZD/JPY extends break below daily cloud, on track to test 78.6% Fib at 77.26, stay short

• NZD/JPY is extending weakness after break below daily cloud, scope for further weakness.
   
• The pair has opened with a bullish gap, but unabated yen buying keeps pressure on the downside.
   
• Yen demand seen across the board despite dovish comments from Bank of Japan (BOJ) Governor Kuroda.
   
• Kuroda was out on wires earlier, stressing the need for continued powerful easing.
   
• NZD/JPY hit session lows of 77.77 and has since pared some losses to currently hover around 78 handle.
   
• Technical studies are biased lower. We see scope for test of 78.6% Fib at 77.77. Violation there could see further weakness.

Support levels - 77.64 (Feb 14, 23 low), 77.35 (Oct 31 low), 77.26 (78.6% Fib), 76.30 (channel base)

Resistance levels - 78.40 (5-DMA), 78.70 (cloud base), 79.06 (20-DMA)

Recommendation: Good to go short on rallies around 78.10, SL: 78.70, TP: 77.65/ 77.35/ 77/ 76.30.

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -21.6019 (Neutral), while Hourly JPY Spot Index was at 95.8795 (Bullish) at 0620 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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