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FxWirePro: NZD/JPY retraces dip below 21-EMA, bearish divergence keeps scope for downside

NZD/JPY chart on Trading View used for analysis

  • NZD/JPY has retraced dip below 21-EMA and is currently trading at 77.78, up 0.26% on the day.
     
  • Improved risk-appetite buoying the antipodeans and reducing demand for yen, pushing the pair higher.
     
  • 21-EMA is strong support and we see weakness only on decisive close below.
     
  • Break below 21-EMA will see weakness. Scope for dip till 200-DMA at 75.75.
     
  • On weekly charts, the pair has been rejected at 200-W SMA. Any upside only on break above.
     
  • 5-DMA is immediate resistance at 77.70 and is sharply lower. RSI and Stochs have rollover from overbought levels.
     
  • We see bearish divergence on RSI and Stochs which adds to the bearish bias and MACD shows bearish crossover on signal line.
     
  • The arrest of Huawei CFO in Canada for violating US sanctions against Iran has casted doubts on the recent US-China trade truce.  
     
  • Also, the March 1st 'hard deadline' for China trade deal set by the U.S. could make investors even more nervous than they already are.
     
  • On the data front, we do not see anything of much significance from New Zealand this week.
     
  • Business NZ will be releasing their data on manufacturing this Friday. This is expected to have a medium impact on the kiwi.

Support levels - 77.19 (21-EMA), 76.26 (Nov 26 low), 75.75 (200-DMA)

Resistance levels - 77.70 (5-DMA), 78.86 (Dec 4 high), 79

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex. 
 

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