Friday, November 22, 2019
Home > Posts > Technical Analysis – NZD/JPY struggles for momentum

Technical Analysis – NZD/JPY struggles for momentum

NZD/JPY struggles for momentum after plunging to a 6½-year low.

NZD/JPY is struggling to recover from its recent plunge to a 6½-year low of 67.56 as the pair once again finds itself testing the psychological 68 level, which could establish itself as a strong support zone.

The momentum indicators are illustrating a weak rebound. The stochastics are heading up, but the %K line already appears to be losing steam and about to cross below the slower moving %D line. The RSI, meanwhile, has flatlined in oversold territory and is not signaling an imminent reversal higher.

If there’s a daily close below the 68 level, the next support would likely come from the 200% Fibonacci extension of the up-leg from 70.25 to 77.23, at 67.28. Slipping below this level could accelerate the declines towards 238.2% and 261.8% Fibonacci extensions at 66.14 and 65.44, respectively, reinforcing the long-term downtrend.

However, if the 68 support holds and prices bounce higher, the first challenge to the upside could arrive at the 138.2% Fibonacci at 69.12, near the January low of 69.15, followed by the 123.6% Fibonacci at 69.55. Clearings these hurdles would significantly ease the downside pressure, but for more convincing signs that the near-term bearish picture is turning positive, prices would need to reclaim the 78.6% Fibonacci at 70.89, close the 20-day moving average.

In the medium-term, however, prices would need to recover above the descending trend line to signal an end to the bearish outlook.


TRADE THE MARKETS     TRY A DEMO ACCOUNT     US TRADERS

All trading involves risk. It is possible to lose all your capital


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

Leave a Reply

Your email address will not be published. Required fields are marked *