Technical Sentiment: Bullish
Key Takeaways
NZD/JPY maintains a slightly bullish slope since 8th August 2014, treading just above 200-Day Simple Moving Average, with an acceleration expected above 87.55.
Technical Analysis
Since bouncing off a long term price pivot zone located at 87.54, NZD/JPY has been trending higher in a slow yet steady manner, pricing in several Higher Lows and Higher Highs in the short term. Price rose as high as 87.54 in last week’s trading, touching and reversing from the first area of interest (200 Simple Moving Average on 4H time frame) to the pip.
Since price is now above 200 SMA on both Daily and 4H, we expect more upside to open up in the coming days. 87.54 remains the only obstacle in the way. Above this level buyers will trigger stop losses from short positions, invalidating the longer term configuration of Lower Highs. This break should be followed by a quick rally up to 88.25/30, where a pivot zone formed in June and July should offer sufficient resistance. Based on overbought conditions, as indicated by Stochastic on 1H through Daily, upside potential should remain capped at 88.30.
Free Reports:
Support is currently located at approximately 86.66/75, marked by a rising trendline and the most recent Higher Low. A dip below this level will invalidate the previously mentioned bullish scenario, which in turn will lead to a re-test of 85.75.
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Prepared by Alex Z., Chief Currency Strategist at Capital Trust Markets
