- NZD/JPY rejected at highs at 86.12, slips lower to currently trade at 81.86.
- Momentum studies are bearish. RSI has slipped below 50 levels and Stochs are also biased lower.
- Bearish divergence observed on RSI and Stochs on daily charts adds scope for further downside.
- The pair has closed below weekly 200-SMA at 82.28 on the previous week.
- We see scope for test of 50-DMA at 81.38. Violation there could see further downside.
- On the flipside, retrace above 20-DMA at 82.57 could see retest of trendline at 83.95.
- Focus now on RBNZ this week, analysts foresee a dovish guidance on the cards. RBNZ is expected to leave the OCR at 1.75%.
- BNZ’s survey of inflation expectations (later today) will also be watched, a surprise in either direction could well influence the RBNZ’s MPS later in the week.
Support levels - 81.67 (July 18 low), 81.37 (50-DMA), 81
Resistance levels - 82.06 (5-DMA), 81.95 (23.6% Fib retrace of 75.626 to 83.910 rally), 82.57 (20-DMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-NZD-JPY-finds-strong-support-at-20-DMA-good-to-go-short-on-break-below-828087) has hit all targets.
Recommendation: Good to go short on rallies around 82 levels, SL: 82.60, TP: 81.40/ 81/ 80.75
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