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Technical Analysis – NZD/JPY rebounds on 75.60

NZD/JPY 21/05/18 | EconAlerts


NZD/JPY rebounds on 75.60 and is set to post another green day; holds in descending triangle in long-term.

NZD/JPY has reversed back up again after finding support at the 11-month low of 75.60, achieved on March 23. This low is the lower boundary of the descending triangle in the long-term timeframe and currently, the pair is set to record the fourth consecutive green day.

Momentum indicators are pointing north to a positive bias in the short-term with the RSI indicator just above the 50 threshold. The stochastic oscillator is moving strongly upwards as the %K line entered the overbought zone and the %D line is following this momentum, underscoring the current upside reversal.

Further gains should see the 23.6% Fibonacci retracement level of 77.50 of the down-leg from 83.88 to 75.51 come into scope. The next level to have in mind is the 38.2% Fibonacci region of 78.70, which stands near the 200-day SMA. A climb above this level would reinforce the bullish structure in the near-term.

In the event of the continuation of the downside trend, the 75.60 trough could act as a barrier to being able to break the triangle formation. A drop below this area would endorse the bearish outlook and would take the pair towards the 73.70 support barrier, identified by the low of November 2016.

In the long-term timeframe, NZD/JPY has been developing within a descending triangle since April 2017, with a weak penetration to the upside in January 2018.

NZD/JPY 21/05/18 | EconAlerts

 

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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


source: XM

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