FxWirePro: NZD/JPY finds major support at 78.55, break below to see further downside

• NZD/JPY is trading in a 'Rising Wedge' pattern on the weekly charts.
   
• The pair finds major support at 78.55 which is wedge base. We see further weakness on break below.
   
• Technical studies are heavily bearish. RSI and Stochs are sharply lower and MACD is showing a bearish crossover on the signal line.
   
• Kiwi edges higher post positive surprise in New Zealand trade balance, pulling the pair higher from lows at 78.56. 
   
• New Zealand trade balance came in at a surplus of NZ 85m vs the expected deficit of 200m. 
   
• But bias highly bearish. Break below 78.55 likely to see test of 61.8% Fib retrace of 69.232 to 83.901 rally at 74.83.
   
• Upside in the pair is seen capped by 200-DMA at 80.13 which is stiff resistance. Upside only on break above.

Support levels - 78.30 (38.2% Fib retrace 69.232 to 83.901 rally), 78.15 (rising trendline), 77.98 (May 30 low)

Resistance levels - 79, 79.37 (5-DMA), 79.68 (100-DMA), 80.13 (200-DMA)

Call update: We had advised a short in the pair (http://www.econotimes.com/FxWirePro-NZD-JPY-slumps-after-rejection-at-200-DMA-good-to-go-short-on-rallies-865022).

Recommendation: Our short call is progressing well. Hold for targets.

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -170.776 (Bearish), while Hourly JPY Spot Index was at 54.8623 (Neutral) at 0220 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex. 

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