FxWirePro: Snap NZD/JPY rallies to deploy short hedge as minor trend slides through sloping channel and flurry of bearish indications on major trend

The minor trend of NZDJPY has been sliding through the sloping channel, despite the continuous rallies from last two weeks ever since it tested channel support, the current price remains below 21DMAs, bears shrug off upswings exactly at channel resistance, both leading & lagging oscillators shows upward convergence but slightly indecisive.

Today’s upswings of this pair are restrained below stiff resistance at 77.363 levels, that’s where shooting star and hammer patterns have occurred at 76.895 and 77.771 levels respectively in the recent past.

On a broader perspective, bears resume with engulfing pattern that takes the current prices below EMAs in the previous months with bearish crossover.

While both leading oscillators converge downwards when prices have slid below EMAs, this signals selling pressures. In the short term trend, the bulls test support at channel baseline but the rallies are not convincing.

For now, can bears plummet more slumps as it constrains below stiff resistance at 77.363 or below 21DMA is what should be closely watched.

The major resistance 1 and resistance 2 are seen at 77.5523 and 78.4385 levels respectively that’s where, historically, the trade sentiments have seen supply zone.

Overall, the prevailing bearish sentiments are mounting to signal weaker trend below 77.363 zones, and the major downtrend has again resumed with the confirmation of momentum indicators.

Hence, we recommend shorting rallies on hedging as well as speculative grounds and decide to buy tunnel spreads using upper strikes at 77.363 and lower strikes at 76.730 levels.

This strategy is likely to fetch leveraged yields than spot FX and certain yields as long as underlying spot FX keeps dropping.

Alternatively, at spot reference: 77.030, contemplating lingering bearish indications, on hedging grounds we recommend shorting near-month month futures as the underlying spot FX likely to target southwards 76.259 levels in the near run.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

Currency Strength Index: FxWirePro's hourly NZD spot index is inching towards -50 levels (which is bearish), while hourly JPY spot index was at shy above -65 (bearish) while articulating (at 10:15 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex.

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