Missed the longer-term trend line break on NZD/JPY?
There could still be chance to catch a quick retest if you’re counting on the reversal to gain traction.
Check out this area of interest on the 4-hour time frame:
NZD/JPY 4-hour Forex Chart by TradingView
A combination of risk-off flows on global trade concerns and hawkish Bank of Japan (BOJ) vibes have kept NZD/JPY on a steady downtrend since last month.
The pair had been forming lower highs connected by a falling trend line, before a strong breakout took place a few days back, as New Zealand’s central bank shifted to a less dovish stance.
Can NZD/JPY sustain its trend reversal from here?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the New Zealand dollar and Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price hit a roadblock on its rally near the 87.00 major psychological mark and R2 (86.99) and appears to be in the middle of a correction to nearby support zones. The Fibonacci retracement tool shows additional levels where Kiwi bulls might be looking to hop in.
The 38.2% Fib lines up with R1 (86.22) while the 50% to 61.8% levels span an area of interest or former resistance zone around 85.35-85.70 that might hold as support. The 100 SMA is still below the 200 SMA for now, suggesting that bearish pressure is present, but the pair has already climbed above these indicators which might hold as dynamic support.
If any of the Fibs are able to keep losses in check, look out for a continuation of the climb to the swing high or to fresh upside targets at R3 (88.45) and beyond. Still, keep your eyes peeled for break below the area of interest that could pave the way for a move back to the March lows around S1 (83.99).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
