Key technical MA broken
The NZDJPY has moved below the 200 day MA for the 2nd day in a row. Yesterday, the pair dipped below the MA at 88.647 (the low reached 88.602), but buyers came in and pushed the price back higher (closed that 89.009). Today, the price has moved back below this moving average, but instead of rebounding, there has been a push away from the key moving average. The low has extended to 88.23.
Needless to say, if the 200 day moving average can now hold resistance (risk defining level), the downside can be further explored. Closer resistance will be eyed at the 88.39 level (broken 38.2% retracement on the daily chart above).
The next major target on the downside from the daily chart comes in at the 87.564 level. This is the 50% retracement of the move up from the February low to the March high. A move below that level opens the door for further downside momentum.
Looking at the hourly chart, before the 87.564 target comes the 88.00 support. This is near the lower trend line connecting recent lows (see chart below).
The break below the 200 day MA is a pretty important technical break. Of course the Reserve Bank of New Zealand interest rate decision will be out tomorrow at 4 PM ET. That will have an impact on the directional bias for this pair. However, for those who are short from above, the 200 day moving average would be a risk defining level.
