FxWirePro: NZD/JPY “Gravestone Doji” indicates more downside potential retest of crucial support 79.647 most likely

On weekly chart, the pair decline from 82.689 to 79.443, it is now struggling to hold onto the support at 80.102 levels.

In later stage of October and earlier November, it has broken 81.004 level closing basis.

You can observe from then how the price behavior of this pair on either side after 79.647 level in the recent historical evidences (see red circled areas).

More importantly, the formation of Gravestone doji pattern candle in between at 80.074 levels (which is above mentioned support zone) now signifies weakness in previous rallies, looks like bears are interested in taking over the control.

The RSI oscillator has begun diverging at around 49 levels which is an alarm to the previous upswing rallies. This would mean that selling pressures are piling up.

Subsequently, %D crossover above 80's intensifies bears interests in the market, as a result we've seen today's lows at 79.984 to slip below 10DMA.

Daily prices are also slipping below 10DMA which is again one more bearish indication. However, closing basis should be closely monitored.

If it does not manage to hold onto current levels we could certainly see near strong support only at 79.647 levels and at 78.330 levels.

Even if it shows upside potential we would still see maximum resistance at 81.004, one can be bullish only the decisive breach above 81.004 but medium term it has to drop back again.

Although we've been observing some bounces we could see with a dubious eyes on Kiwi fundamentals which are not that conducive and hence, we maintain long term bearish trend in our opinion.