FxWirePro: NZD/JPY recovery lacks traction, channel base at 71.75 in sight, stay short

NZD/JPYchart on Trading View used for analysis 

• NZD/JPY recovery lacks traction, bias remains bearish. We see upside only on decisive break above 55-EMA.
   
• The pair is currently trading at 72.16, up 0.14% on the day. Finds immediate resistance at 5-DMA at 72.90.
   
• Momentum with the bears, we see extension of downside in the pair. 
   
• The safe-haven Japanese currency to remain bid on escalating US-China trade tensions.
   
• The Trump administration is likely to impose a fresh set of duties on $200bn (£155bn) of Chinese goods, having levied 25% tariffs on $50 billion worth of Chinese exports in July.
   
• The pair trades in a downward channel and finds strong resistance at 55-EMA at 74.50. We see bearish invalidation only on break above.
   
• We see scope for test of channel base at 71.75. Violation there could see major downside. 

Support levels - 72.35 (Aug 13 low), 71.75 (channel base), 71

Resistance levels - 72.90 (5-DMA), 73.62 (21-EMA), 74.50 (55-EMA), 75

Call update: Our previous call (https://www.econotimes.com/FxWirePro-NZD-JPY-resumes-weakness-after-rejection-at-55-EMA-eyes-channel-base-at-7175-stay-short-1423201) has hit TP1/2.

Recommendation: Hold for further weakness.  

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -87.0159 (Bearish), while Hourly JPY Spot Index was at 94.8335 (Bullish) at 1130 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.