- NZD/JPY remains capped below 5-DMA at 78.20, momentum studies are bearish.
- The major ran into fresh offers as data released earlier today showed a dismal New Zealand trade balance.
- Statistics New Zealand reported a trade deficit of NZD 566 million, wider than the NZD 227 million deficit in January last year and the largest for the month since 2007.
- The pair is extending weakness after break below daily cloud, scope for further weakness.
- NZD/JPY is down 0.24% on the day and is currently hovering around 77.86 levels.
- Technical studies are biased lower. We see scope for test of 78.6% Fib at 77.77. Violation there could see further weakness.
Support levels - 77.64 (Feb 14, 23 low), 77.35 (Oct 31 low), 77.26 (78.6% Fib), 76.30 (channel base)
Resistance levels - 78.20 (5-DMA), 78.70 (cloud base), 78.97 (20-DMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-NZD-JPY-extends-break-below-daily-cloud-on-track-to-test-786-Fib-at-7726-stay-short-1168197) is progressing well.
Recommendation: Bias lower, stay short.
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