NZD/JPY has shown a very choppy price action over the past two months. At the same time, the price is moving lower towards new lows.
The pair broke below the descending channel providing interesting support and resistance levels as well as a potential downside target. For example, 61.8% level – R2 (89.90) was acting as resistance, which has been acting as a support prior to the channel breakout. Currently, NZD/JPY is trading near R1 (89.25) that was rejected yesterday. At the same time, CCI oscillator holding the downtrend trendline.
All in all, the pair looks bearish and the trend should continue downwards. Consider selling NZD/JPY at the current level (88.84) targeting 0% Fibonacci – S3 (86.49) area. Only a break above the key resistance (R2) could change the direction and establish an uptrend.
Support: 88.60, 87.80, 86.50
Resistance: 89.25, 89.90
