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NZDJPY offers good risk/reward If the set up completes.


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With the medium-term outlook in NZDUSD still offering a mild downward bias, NZDJPY offers good risk/reward If the set up completes.

 

Weekly:  After a strong rally from Q4 2017 the cross has consolidated for the last four weeks. The close of this week’s candle will be important. A low close (below 80.00) and we have a bearish outside bar. This should lead to more downside movement towards the trend of higher lows at 76.30

NZDJPY IG W.png

 

Daily: Although we have broken the trend of lower highs, price action has formed an Evening Star. This often highlights the top of as trend.

NZDJPY D IG.png

 

Intraday (four hour) – Two scenarios:

  1. We move directly down to the 261.8% extension at 79.44 from 81.56-80.75. With bespoke support at 79.32, I think we will bounce from here and be able to gain a better short entry near 80.50
  2. We consolidate a move towards previous resistance at 81.30, this in turn making a right shoulder of a bearish head and shoulders pattern.

nzdjpy ig 4.png

 

In regards to the PIA analysis, no representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.

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