NZD/JPY 1H Chart: Two scenarios possible
After testing a three-month high of 81.50 late in January, the bearish sentiment took the upper hand in the market and stranded the NZD/JPY exchange rate in a descending channel. The Kiwi tested the senior channel at 77.80 mid-February and has since edged higher in another short-term formation.
The existence of the monthly S1 at 79.20 has restricted the pair’s movement above this level for two weeks now. This line together with the dashed trend-line has formed a triangle-like formation. The positioning of this pattern and the prevailing channel down suggest that the rate could breach this up-trend and move lower down to the 77.00/77.50 area during the following trading sessions. In order to confirm this scenario, the pair has to breach the 55-, 100– and 200-hour SMAs at 78.60.
Conversely, a breakout of 79.20 would push the rate towards the senior channel, the weekly R2 and the 50.00% Fibo retracement located at 80.00.
The existence of the monthly S1 at 79.20 has restricted the pair’s movement above this level for two weeks now. This line together with the dashed trend-line has formed a triangle-like formation. The positioning of this pattern and the prevailing channel down suggest that the rate could breach this up-trend and move lower down to the 77.00/77.50 area during the following trading sessions. In order to confirm this scenario, the pair has to breach the 55-, 100– and 200-hour SMAs at 78.60.
Conversely, a breakout of 79.20 would push the rate towards the senior channel, the weekly R2 and the 50.00% Fibo retracement located at 80.00.