- NZD/JPY is trading in a narrow range after Doji formation on Thursday.
- Technical indicators on daily charts are still heavily bearish, but pair finds strong trendline support at 76 levels.
- We see any further weakness only if pair manages to break below 76 mark.
- Daily Ichimoku cloud weighs heavily on the upside, which keeps bias lower.
- Break below trendline support at 76 levels will see test of 75.50 (trendline).
- On weekly charts, price action has failed to hold above weekly 50-SMA at 77 levels. Bearish invalidation on weekly close above 77 levels.
Support levels - 76 (trendline), 75.50 (trendline), 74.80 (61.8% Fib retrace of 69.23 to 83.80 rally)
Resistance levels - 77, 77.36 (cloud base), 77.48 (20-DMA), 78
Call update: We had advised a short call on NZD/JPY (http://www.econotimes.com/FxWirePro-Cloud-caps-upside-in-NZD-JPY-good-to-short-rallies-709904).
Recommendation: Stay short.
FxWirePro Currency Strength Index: FxWirePro's Hourly NZD Spot Index was at -45.1566 (Bearish), while Hourly JPY Spot Index was at 74.1417 (Slightly bullish) at 0620 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
