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The #JPY looks to be getting stronger, especially against the weaker currencies such as the New Zealand Dollar.
This has led to a change in the trend on the #NZDJPY, which could offer some short opportunities.
Watch the video to learn more…
Today, we’re going to look at NZD/JPY.
In this week’s Forex Market Outlook, we spoke about the potential of the JP Yen to gain strength as it was at an extreme weakness, which means that it will either remain weak or reverse.
If we look at the NZD/JPY chart, the price is now giving us a sign that we’ll see a change in trend.
Weekly timeframe
In the weekly timeframe, the market went up to the 79.20 area multiple times and it continued to reject that point. What’s interesting is that we have now broken last week’s low.
Typically, that’s a sign that the price will continue to move to the downside.
The NZD/JPY rejected the key resistance of 79.20 a few times, suggesting that the market will break lower. Currently, the price has broken through last week’s low, adding further confluence to a move lower.
The last supporting area on the weekly timeframe was 76.67. The price found some support there in the past. That would be the area I would expect the price to go to. If we can get a good trade down, there is a lot of space to work with.
Daily timeframe
If we go down into the daily timeframe, the market is starting to change that structure. The price is now breaking out of this consolidation where the market was almost in a daily channel and has now broken through that.
In the daily timeframe, the price formed a new lower low after breaking the trendline support. If the daily closes like this, we can expect a reversal to the daily trend.
If we get that close below, that is a good sign that the price will head to the downside. When the price is in an impulse phase, we look for a four-hour change in cycle.
Four-hour timeframe
In the four-hour timeframe, the price is now starting to make lower lows and lower highs. Ideally, we want to see a pullback and a continuation of that point.
The 78.47 area acted as a support a few times and could act as resistance for a reversal setup.
The four-hour timeframe highlights the break lower and a key resistance to watch. The previous breakout lows at 78.47 recently acted as support and should act as resistance if the price retests.
So, keep an eye on NZD/JPY. The strength and weakness are flipping there. The daily is breaking to the downside and it looks like the price is going to drop further. Meanwhile, 76.67 could be the overall target of a move down.
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