FxWirePro: NZD/JPY recovery capped below 21-EMA, momentum with the bears

NZD/JPY chart on Trading View used for analysis

• NZD/JPY pauses recovery shy of 21-EMA at 73.86, momentum with the bears.
   
• Recovery attempts in the pair lack traction. Price has slipped from session highs at 73.66 and is currently trading at 73.24 levels.
   
• The pair trades in a downward channel and finds strong resistance at 55-EMA at 74.66. We see bearish invalidation only on break above.
   
• Kiwi remains weak in response to poor NZ data and growing conviction among markets that the next RBNZ policy move will be a cut - rather than a hike.
   
• Technicals support further weakness. Stochs and RSI are sharply lower and MACD is on verge of bearish crossover on signal line.
   
• We see scope for test of channel base at 71.75. Violation there could see major downside. Bearish invalidation only above 55-EMA.

Support levels - 73.29 (5-DMA), 73, 72.35 (Aug 13 low), 71.75 (channel base), 71

Resistance levels - 73.87 (21-EMA), 74.66 (55-EMA), 75

Call update: Our previous call (https://www.econotimes.com/FxWirePro-NZD-JPY-resumes-weakness-after-rejection-at-55-EMA-eyes-channel-base-at-7175-stay-short-1423201) has hit TP1.

Recommendation: Book partial profits at lows. Hold for further weakness. 

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -51.2661 (Neutral), while Hourly JPY Spot Index was at -72.5643 (Neutral) at 0700 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.