FxWirePro: NZD/JPY resumes weakness after rejection at 20-DMA, on track to test 71.75 (channel base), stay short

NZD/JPY chart on Trading View used for analysis

• NZD/JPY resumes weakness after rejection at 20-DMA, momentum with the bears.
   
• Recovery attempts in the pair lack traction, we see extension of downside in the pair. 
   
• The safe-haven Japanese currency picked up a bid on escalating US-China trade tensions, weighing on JPY crosses across the board.
   
• The Trump administration is likely to impose a fresh set of duties on $200bn (£155bn) of Chinese goods later today, having levied 25% tariffs on $50 billion worth of Chinese exports in July.
   
• 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.
   
• We see scope for test of channel base at 71.75. Violation there could see major downside. 

Support levels - 72.35 (Aug 13 low), 71.75 (channel base), 71

Resistance levels - 73.07 (5-DMA), 73.74 (21-EMA), 74.58 (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: Hold for further weakness. 

FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -89.0575 (Bearish), while Hourly JPY Spot Index was at 90.2019 (Bullish) at 0745 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.