The New Zealand dollar recently tumbled against most major currencies, including the Japanese yen. There were a couple of important economic releases lined up, including the New Zealand dairy auction results and employment data. Both were somehow on the disappointing side, as the New Zealand dairy auction registered a fall of -8.4%. This increased the bearish pressure on the NZDJPY pair, and it broke an important support area to trade lower. Moreover, the employment data was also published by the Statistics New Zealand, which pointed that the employment change was around 0.4%, missing the expectation of 0.7%. So, it again ignited a down-move in the NZDJPY pair.
There was an important bullish trend line formed on the hourly chart for the pair, which was breached yesterday after the US ISM non-manufacturing PMI release. The pair also broke the 200 and 100 hourly moving averages to trade as low as 86.41. The pair is under correction as of writing, and it is possible that the pair might retrace back towards the 23.6% fib retracement level of the last drop from the 87.50 high to 86.41 low. There is also a chance that the pair might test the 50% fib level, but in that case, it is very likely that sellers might appear to take the pair lower in the short term.
The most important resistance can be seen around the 200 hourly moving average, which acted as support earlier, and might act as a resistance for the pair. The RSI is around extreme levels, which adds to the view of a short term correction.
Overall, any major rallies can be seen as a selling opportunity until the pair successfully closes above the 200 hourly moving average.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
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