- NZD/JPY recovery capped at 83 handle, edges lower to break below 20-DMA at 82.72.
- The pair is extending downside for 4th consecutive session, bias lower.
- Technical indicators have turned bearish, RSI and Stochs have turned from near overbought levels and biased lower.
- Bearish divergence observed on RSI and Stochs on daily charts adds scope for further downside.
- Immediate support on the downside seen at 81.95 (23.6% Fib), we see further weakness on break below.
- On the flipside, we see bearish invalidation only on break above trendline resistance at 83.95.
Support levels - 82.28 (weekly 200-SMA), 81.95 (23.6% Fib retrace of 75.626 to 83.910 rally), 81.67 (July 18 low)
Resistance levels - 83.10 (5-DMA), 83.80 (Jan 27 high), 83.95 (trendline)
Call update: We had advised a short call (http://www.econotimes.com/FxWirePro-NZD-JPY-finds-strong-support-at-20-DMA-good-to-go-short-on-break-below-828087).
Recommendation: Good to go short on decisive break below 20-DMA.
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