NZDJPY: One for your watchlists

The weekly Head and Shoulders reversal is still in play (although the neckline has already been challenged this week) but price is currently just below this key level.

I am open to the distinct possibility that the H&S may become invalidated as price grinds higher, but due to the elongated Bearish Engulfing candle 5 weeks ago I will still be seeking areas of resistance to fade into over the coming weeks.

The daily timeframe is within a messy channel but due to the overlaps of the daily ranges (and intraday price action) I strongly suspect this is a correction, building up to another leg down.

As we are approaching the weekend I am not looking to enter this week. Ideally we will be treated to bearish reversal candles around current levels, which may then provide a bearish sell signal to enter short next week.

In the event we break above the neckline then intraday momentum is bullish, so buy setups within the channel would be preferred. Additionally we could use a bearish break of this channel in future to assess potential sell-opportunities back in line with the weekly bearish momentum.

Until a signal is presented, this will remain in my hotlist, but not one to touch just yet.

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