- NZD/JPY has broken major trendline support at 76 levels, we see scope for further downside.
- Yen demand on the rise in Asia on heightened trade war angst as China lashes out against US in trade wars.
- Reports suggest the Chinese are preparing a raft of duties on US goods targeting key exportation industries in the US economy.
- Technical studies for the pair are highly bearish. RSI is below 50 and momentum is bearish.
- 20-DMA is pointing south and we see -ve DMI dominance which adds to bearish bias.
- Break below major trendline support at 76 raises scope for test of 74.83 (61.8% Fib retracement of 69.232 to 83.910 rally).
- On the flipside, 5-DMA at 76.30 is immediate resistance, break above 20-DMA at 77.05 negates bearish bias.
Support levels - 75.62 (April 12 low), 75, 74.83 (61.8% Fib retracement of 69.232 to 83.910 rally)
Resistance levels - 76, 76.30 (5-DMA), 77.05 (20-DMA), 78
Recommendation: Good to go short on rallies around 75.75/76, SL: 76.80, TP: 75/ 74.85/ 74.
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