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JGB TECHS

(Z1) Bearish Trend Condition

AUSSIE 10-YEAR TECHS

(Z1) Bearish Price Sequence

AUSSIE 3-YEAR TECHS

(Z1) Off Recent Highs

US 10YR FUTURE TECHS

(Z1)‌‌ Support Appears Exposed

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NZD/JPY staged a round trip from Y76.56 on Monday, driven by gyrations in risk appetite. The rate sold off in the first half of the day, as Sino-U.S. tensions and China's crackdown on some education firms undermined broader sentiment. This was followed by a dynamic rebound, as risk appetite returned, but NZD/JPY struggled to make much headway beyond last Friday's high of Y77.29.

  • The rate last sits at Y77.27, virtually unchanged on the day. Losses past Jul 22 low of Y76.51 and the 200-DMA at Y75.94 would shift bearish focus to the 23.6% retracement of the 2020 - 2021 valley-to-peak rally at Y75.31. This key layer of support limited losses on Jul 20 and in early/mid-Feb. Meanwhile, bears keep an eye on the descending 50-DMA, which is approaching the nearby 100-DMA.
  • On the flip side, should bulls manage to force a break above Jul 14 high of Y77.66, they could set their sights on Jul 6 high of Y78.77. A clean break here would suggest that bulls are taking control.
  • Signs of topping out can be noticed on the monthly chart, with the rate losing some ground after forming a bearish engulfing candlestick pattern (see chart below). This technical pattern materialised after the 50-MMA crossed below the 200-MMA, forming a death cross. Further technical signals will be eyed for confirmation if this recent pullback has potential to turn into a deeper sell-off.

Fig. 1: NZD/JPY (monthly chart)

Source: MNI - Market News/Bloomberg