In our recent post on NZDJPY, we had explicitly stated that the hanging man and engulfing patterns repeat the history at stiff resistance and according advised DNT for intermediate speculation.
This month, NZDJPY bears resume with bearish engulfing patterns that take the current prices below 38.2% levels.
The minor trend has been sliding in the sloping channel, while both leading as well as lagging oscillators signal overbought pressures. In the short term trend, the bulls test support at channel baseline but the rallies are not convincing. "Can bears plummet more slumps upon breach below channel support" is what should be closely watched.
The major resistance is seen at 79.281 areas that’s where, historically, the trade sentiments have seen demand zone.
While in the short trend, the attempts of bull swings restrained below 7&21-DMAs.
RSI converges to the ongoing price dips as this leading oscillator trending below 33 levels which is a caution for aggressive bears, the same has been the case when you’ve to plot daily charts.
Bearish momentum in short-term selling sentiments is intensified as stochastic oscillator evidences %D crossover which is again bearish signal even below oversold territory.
MACD also substantiates this bearish standpoint but this would be deemed as indecisiveness on monthly terms.
NZDJPY price, volumes, leading and lagging indicators moving in tandem with bear swings.
Overall, the prevailing bearish sentiments are mounting to signal weaker trend below 78-78.50 zone, which was signaled in the recent history as well.
Hence, we recommend shorting rallies on speculative grounds and decide to buy tunnel spreads using upper strikes at 78.264 and lower strikes at 77.500 levels.
This strategy is likely to fetch leveraged yields than spot FX and certain yields as long as underlying spot FX keeps dipping but within lower strike.
Currency Strength Index: FxWirePro's hourly NZD spot index is inching towards -29 levels (which is bearish), while hourly JPY spot index was at shy above 38 (bullish) at the time of articulating (at 03:35 GMT). For more details on the index, please refer below weblink:
http://www.fxwirepro.com/currencyindex.
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