FxWirePro: NZD/JPY breaks 200-DMA at 77.97, bias higher, stay long

• NZD/JPY spikes past 200-DMA at 77.97 to hit fresh highs for the week at 78.33.
   
• The preliminary Nikkei-Markit PMI data released on Tuesday showed Japanese manufacturing activity in May expanded at a slowest pace in six months.
   
• Focus remains on annual NZ budget due on Thursday, reaffirmation of NZ’s solid fiscal position will boost NZD.
   
• Technical indicators have turned bullish, Stochs have bounced-off from near oversold levels and RSI points north.
   
• Close above 200-DMA will confirm further bullishness, scope for test of 79.20 (trendline).
   
• Caution advised as 'Death Cross' seen on daily charts, bullish invalidation likely on close below 50-DMA at 77.54.

Support levels - 77.97 (200-DMA), 77.59 (20-DMA), 77, 76.52 (50% Fibo 69.23 to 83.80 rally), 76

Resistance levels - 78.50 (May 16 high), 78.75 (38.2% Fibo 83.80 to 75.62 fall), 79.20 (trendline)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-JPY-struggles-at-major-resistance-at-7740-further-upside-likely-on-break-above-714259) has hit TP1.

Recommendation: Book partial profits at highs. Raise trailing stops to 77.55. Hold for upside.

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at 104.391 (Bullish), while Hourly JPY Spot Index was at -36.5326 (Neutral) at 1040 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.