Last Monday we discussed the NZDJPY. More specifically, we were watching for directional cues at the 82.00 handle. The level has served as support since the pair broke above it on June 30th.
However, instead of retesting 82.00, buyers pushed prices through the range ceiling at 83.20. That wasn’t too surprising given the uptrend that’s been in place since April.
One thing that struck me is how the NZDJPY reversed during the July 27th session. You may recall from my July 24th commentary that 83.80 was the location of the double top between December of 2016 and January of this year.
Note that the July 27th reversal came after carving a session high of 83.90, just 10 pips above the resistance level we discussed. It was the primary reason I wasn’t interested in playing a break to the upside.
With sellers once again in the driver’s seat, our attention turns back to support at 82.00. But just like last Monday, it’s going to take a daily close (5 pm EST) below the level to pique my interest in a short position. Until that time comes, I’ll remain on the sideline.
A daily close below 82.00 would pave the way for a move toward the next key support at 80.65. This area played a critical role throughout December of 2016.
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