- Kiwi ignores upbeat NZ merchandise trade data, NZD/JPY edges lower, trades 0.22% down.
- New Zealand posted an unadjusted trade surplus of $640m in December, which was well above market expectations.
- Kiwi remains on the back foot after last week's dismal New Zealand Q4 CPI reading.
- The pair slipped below 200-DMA at 79.66, to hit new 5-week lows at 79.52.
- Decisive break below 200-DMA will raise scope for test of 79.12 (50-DMA).
- Technical indicators support downside. Bearish divergence on intraday charts keeps scope for weakness.
- Upside capped below 5-DMA at 79.90. We see bearish invalidation only above 20-DMA.
Support levels - 79.47 (38.2% Fib retrace of 76.09 to 81.56 rally), 79.12 (50-DMA), 79
Resistance levels - 79.66 (200-DMA), 79.89 (5-DMA), 80.27 (23.6% Fib), 80.50 (20-DMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-NZD-JPY-recovery-capped-below-5-DMA-bearish-divergence-keeps-scope-for-downside-1115227) has almost hit TP2.
Recommendation: Bias lower, stay short.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -80.1637 (Bearish), while Hourly JPY Spot Index was at 160.162 (Bullish) at 0630 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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