- NZD/JPY has formed a W-formation on the daily chart that offers a downside target for the bears.
- The 1-hour time frame is still highly bullish according to MACD.
The bears are waiting for developments on the lower time frames in this pair to confirm the downside bias.
The following illustrates where the next trading opportunity could arise from a downside correction of the latest bullish impulse on the daily and hourly charts.
W-formation in the making
As illustrated, the market is in the process of forming a W-formation and the neckline of the pattern would be expected to act as support in a correction.
As it stands, a 61.8% Fibonacci retracement has a confluence with the neckline of the pattern for bears to target.
However, from an hourly perspective, the price still in bullish territory and there is plenty of work for the bears to do yet before any conviction can be confirmed by MACD.
There is also a support structure en route to the target that will need to be challenged.
This is a pair that can be placed on the watchlist, monitoring for bearish developments and confirmations.
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