FxWirePro: NZD/JPY likely to drag slumps below DMAs after evening star pattern, consolidation phase seems to be restrained below 61.8%

Evening Star candlestick pattern has occurred at 82.295 levels, this bearish pattern signals slight weakness in the short run.

The current prices are well below 21DMAs after evening star pattern, more slumps likely upon breach below strong support at 82.169.

While the attempts of bull swings in consolidation phase from last two months are restrained below 61.8% Fibonacci retracements to indicate weakness, consequently, bullish momentum seems to be shrinking away.

NZDJPY price, volumes, leading and lagging indicators moving in tandem with bear swings.

While both leading & lagging indicator to substantiate bearish stance on 4H charts, MACD remaining in bullish trajectory also substantiates this standpoint but this would be deemed as indecisiveness in current rallies.

RSI converges to the ongoing price dips as this leading oscillator trending below 57 levels which is a caution for aggressive bears, the same has been the case when you’ve to plot daily charts, it signals weakness as it touched 57 levels.

Bearish momentum in short term selling sentiments is intensified as stochastic oscillator evidences %D crossover which is again bearish signal.

Hence, we recommend shorting rallies on hedging grounds and decide to initiate shorts in futures contracts with near month tenor.

Well, at spot reference: 82.162, contemplating lingering bearish indications, on hedging grounds we recommend shorting near-month month futures as the underlying spot FX likely to target southwards 81.500 levels in near run.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.

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