- NZD/JPY extends grind lower after rejection at channel top, bias still lower.
- The pair has broken major trendline support and closed below 20-DMA on Tuesday's trade.
- We see a bearish 5 and 20-DMA crossover on daily charts. Technical indicators bearish.
- RSI has slipped below 50 levels and Stochs are also biased lower. Bearish divergence observed on RSI and Stochs on daily charts adds scope for further downside.
- Next bear target is 50-DMA at 81.24. Violation there could see further downside.
- On the flipside, retrace above 20-DMA could see retest of channel top at 83.95.
Support levels - 81.67 (July 18 low), 81.24 (50-DMA), 81
Resistance levels - 81.95 (23.6% Fib retrace of 75.626 to 83.910 rally), 82.51 (5-DMA), 82.67 (20-DMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-JPY-finds-strong-support-at-20-DMA-good-to-go-short-on-break-below-828087) has almost hit all targets.
Recommendation: Book partial profits at lows, lower stops to 82.70, stay short for 81.25.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -84.4178 (Bearish), while Hourly JPY Spot Index was at -33.2085 (Neutral) at 0520 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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