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Technical Analysis – NZDJPY bearish scenario strengthens

The bearish scenario for NZDJPY is looking more valid after prices fell below the Ichimoku cloud at the end of May. Prices rose from 84.04 to 92.39 (see trend line) but reversed lower and fell below the trend line. The shift in the upside bias was confirmed by the bearish crossover of the tenkan-sen line below the kijun-sen line. These two lines are falling and are negatively aligned, which highlights the bearish bias.

RSI is falling and is in bearish territory below 50. It is entering oversold territory below 30 which indicates that there would be some consolidation in the near term.

Meanwhile, prices have fallen below the 23.6% Fibonacci of the upleg from, 56.99 (November 2011) to 94.02 (December 2014).This level at 85.32 is now acting as immediate resistance. To the downside, the low of 84.04 is the next support level. A break below this would see a stronger downside bias.

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