NZD/JPY Price Analysis: Bulls in control, but bearish case can be made
- NZD/JPY bulls take on the bear's commitments at a thick layer of resistance structure.
- There is a downside bias until bulls breach overhead resistance.
The price action in recent trade has been bullish and the bulls remain in control.
The following is a technical analysis of the price structure between the daily and 4-hour time frames from which swing traders can observe subsequent developments and determine their game plan.
Daily chart
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The daily bearish impulse was corrected in a significant Fibonacci retracement which has, in recent trade, penetrated beyond the 61.8% Fibonacci retracement level.
That being said, the bulls still have their work cut out given the amount of liquidity ahead.
Sellers may well engage at this juncture and in force.
4-hour chart
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From a 4-hour perspective, the environment is, indeed, bullish.
However, if the first layer of resistance holds, then the downside is compelling, especially should the price fall below the 21-moving average.
A break of support and a restest of the structure would offer an optimal entry point for bears to engage in what would be expected to be a downside extension of the daily bearish impulse.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
