For those of you still keeping an eye on the market this week, an interesting pair to look at is NZDJPY. It goes without saying that vol. is expected to be light this week due to usual Christmas slump, but this can present some opportunities. It’s also worth noting trading in times of low vol. can be risky; moves can be exaggerated, the instances of phantom moves can increase and volatility is somewhat unpredictable. In saying that, the big barriers can provide even more support/ resistance at times like this.
One such barrier is 90.00 in NZDJPY. This has been a pivotal level from the pair this year. Firstly, it required a huge effort from traders for this level to be breached. NZDJPY attempted to push above this level numerous times this year, but it just didn’t have the legs. That was until a massive surge in late October led by widespread JPY weakness on the back of more stimulus from the BoJ propelled NZDJPY through 90.00.
Earlier this month NZDJPY retested 90.00, but this time it was acting as a support zone. In fact, it was a very important support zone as it was beefed-up by the obvious psychological factors and it coincided with the pair’s 38% retracement level from October’s low. The pair then did an about-face and it’s now heading back towards an all-important resistance zone around 93.50. A rejection here may provide some opportunities for range trading...
NZDJPY - Daily
Source: FOREX.com
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