NZDJPY has developed uptrend-line from the lows of 72.887 levels to the current 74.388 levels.
Bullish engulfing pops-up exactly at this uptrend-line, bullish engulfing patterns have occurred at 74.154 and 74.318 levels.
While both leading & lagging indicators are in line with upswings. RSI and stochastic curves are showing upward convergence to signal the intensified momentum in the prevailing upswings. To substantiate this bullish stance, MACD has also shown bullish crossover that
indicates the uptrend continuation (refer daily chart).
Consequently, bulls have been dragging rallies above 7-DMAs, any decisive break-out above 75.4563 (i.e. 21-DMA levels).
On a broader perspective, contrary to the above standpoint, bearish engulfing has occurred at 73.545 levels that intensifies major downtrend below EMAs, while bulls attempt to bounce-back on hammer formation at 75.271 levels but restrained below 21-EMAs (refer monthly chart).
For now, more slumps seem to be on cards as both lagging indicators signal bearish trend continuation on this timeframe.
Hence, we advocate maintaining shorts in mid-month futures with a view of arresting downside risks ahead of RBNZ's monetary policy this week, that is most likely to be unchanged. Alternatively, one can also buy one-touch call options with upper strikes at 74.4530 levels on intraday trading grounds.
Currency Strength Index: FxWirePro's hourly NZD spot index is inching towards -45 levels (which is bearish), JPY at -9 (neutral), while articulating (at 07:49 GMT).
For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex