Matt Simpson, CFTe, MSTA
CityIndex
A follow up post to the previous NZDJPY analysis in light of the recent (and rapid) price developments.
SUMMARY:
- Seeking bearish setups on D1 and H4 next week to anticipate bearish break
- A break below 85.70 target 84 and 81.50 over the coming weeks
- Whilst we remain above 85.70, technically, W1 remains within sideways correction
I'll be making the assumption of a bearish engulfing close this week, which leaves the question of how close to the neckline we will close. If anything I would like to see a rebound from current levels which may provide suitable selling opportunities next week, for those seeking to assume a downside break below 85.70.
At time of writing we hover around the 50 week MA, so it is possible to see profit taking around these levels as we finish the week off.
A more conservative approach is to wait for confirmation of a H&S below 85.70 before seeking bearish setups below the neckline.
Assuming we do see a rebound from the lows then obvious levels to consider bearish setups are around 86.70 and 87.10 (where the 50 and 200 day MA meet). However something to keep in mind with the Kiwi Dollar is that when it sells off, it tends not too much around. So unless we see particularly poor data from Japan next week combined with a need to turn bullish on kiwi Dollars again, my bias remains for shallow pullbacks going into next week.
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