- Sell off seen across markets as the tensions escalate after North Korea's latest ballistic missile test.
- Safe haven assets like the Yen in demand, weighing on NZD/JPY. The pair is extending downside for 6th successive week.
- Technical studies on weekly charts are heavily bearish. Stochs and RSI are sharply lower.
- We have seen a decisive break below major trendline support at 78.75, bias lower.
- Cloud base at 76.53 is next major support on the downside. Break below targets 61.8% Fib at 74.83.
- On the flipside, 20-DMA at 79.59 is immediate resistance. We see minor upside on close above. Bearish invalidation only on close above 200-DMA.
Support levels - 78.30 (38.2% Fib retrace 69.232 to 83.901 rally), 78.10 (rising trendline), 77.98 (May 30 low)
Resistance levels - 79.04 (5-DMA), 79.60 (20-DMA), 79.86 (100-DMA), 80.16 (200-DMA)
Recommendation: Good to go short on rallies around 78.60/70, SL: 79.60, TP: 78.10/ 77.55/ 77/ 76.30.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -64.1641 (Neutral), while Hourly JPY Spot Index was at 96.9398 (Bullish) at 0840 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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