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NZD/JPY Testing a Rising Channel Support

At Channel Support:
NZD/JPY is trading in a rising channel, that originated from the August low of 85.73. This week, it stalled at 88.05, and has been consolidating after the RBNZ monetary policy statement. RBNZ governor Graeme Wheeler commented that the Kiwi was too high, and that he expects it to decline in coming months. This put pressure on the NZD across the board.

NZD/JPY is now trading just above its rising channel support. Will it top off, and shift into a bearish trend? 

NZD/JPY 4H chart

(click to enlarge)

Signals:
- A break below 87.25 might start this scenario as it would clear below the channel support and place price below the 100-, and 50-period SMAs in the 4H chart.
- We should also look for the RSI to dip below 40. IF it dips below 30, it would be an even stronger evidence of bearish momentum.
- A stronger price signal would be a break below 87.00. 
- Also, if there is a pullback, a hold below a pivot at 87.60 would help confirm the bearish outlook.

Flag/Pennant and Double Top:
When we look at the daily chart, we can see that the channel is really a flag or pennant pattern the followed a bearish swing from 89.68 to 85.73. If price does indeed break below 87.00, it would clear back below the 200-day SMA, and revive the bearish outlook, which has downside risk first toward the 85.73 low, then a swing projection toward 84.10. 

Note that if price breaks below 85.73, it would also form a double top. 

Furthermore, it should be noted that the daily RSI is holding below 60, which shows maintenance of the bearish momentum established during the July decline.

NZD/JPY Daily Chart 9/12

(click to enlarge)