Missed the longer-term trend line break on NZD/JPY?
There could still be probability to catch a fast retest in the event you’re counting on the reversal to achieve traction.
Try this area of interest on the 4-hour timeframe:
NZD/JPY 4-hour Forex Chart by TradingView
A mixture of risk-off flows on global trade concerns and hawkish Bank of Japan (BOJ) vibes have kept NZD/JPY on a gradual downtrend since last month.
The pair had been forming lower highs connected by a falling trend line, before a powerful breakout took place just a few days back, as Recent Zealand’s central bank shifted to a less dovish stance.
Can NZD/JPY sustain its trend reversal from here?
Do not forget that directional biases and volatility conditions in market price are typically driven by fundamentals. In the event you haven’t yet done your homework on the Recent Zealand dollar and Japanese yen, then it’s time to examine out the economic calendar and stay updated on every day 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 midst of a correction to nearby support zones. The Fibonacci retracement tool shows additional levels where Kiwi bulls is likely to be trying 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 which may hold as support. The 100 SMA remains to be below the 200 SMA for now, suggesting that bearish pressure is present, however the pair has already climbed above these indicators which could hold as dynamic support.
If any of the Fibs are in a position 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 realm of interest that would pave the way in which for a move back to the March lows around S1 (83.99).
Whichever bias you find yourself trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that would influence overall market sentiment!