- NZD/JPY hovers around major trendline resistance at 77.50, break above to see further upside.
- Upbeat China trade balance supports the kiwi, the pair extends break above 20-DMA at 77.10, briefly hits highs of 77.53.
- China trade balance USD came in at $40.21B, above forecasts ($35B) in November.
- The pair is trading in a falling triangle pattern and rejection at major trendline resistance at 77.50 could see resumption of downside.
- Technical studies on daily charts are neutral to slightly bullish, and the pair trades with a neutral to slightly bearish bias on weekly charts.
- Close above 77.50 could see further upside, while close below 20-DMA at 77.11 raises scope for downside.
- Doji formation on weekly charts keeps scope for downside. Next major support below 77 handle lies at 76.57 (50% Fib retrace of 69.232 to 83.910 rally).
Support levels - 77, 76.57 (50% Fib retrace of 69.232 to 83.910 rally), 76 (trendline support), 75.62 (Apr 12 low)
Resistance levels - 77.50 (trendline), 77.93 (23.6% Fib retrace of 83.91 to 76.09 fall), 78.43 (50-DMA)
Recommendation: Watch out for close below 20-DMA to go short, target 76.60/ 76/ 75.70.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at 72.5542 (Neutral), while Hourly JPY Spot Index was at -73.3057 (Neutral) at 0530 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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