NZDJPY Back to 82.00 Following Rejection at Range High

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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NZDJPY daily time frame

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2 comments
Steve says

I like your plotting… I think we have a H&S forming… I reckon a push higher for the right shoulder then drop below you support and short on retest of 82.00

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Bert says

I still contend that what we are seeing here is a Flat wave 4 Elliott Wave. If you go down to a 4 H chart,
you can see 2 three wave portions with the last extended & terminating upward beyond the consolidation, then falling down in a 5 wave pattern and terminating below the level of the consolidation (called an Expanded Flat) At this point we are seeing rejection of the area and should now see the formation of the 5th wave. If this looks like a Head and Shoulder formation, it would be a continuation formation rather than the traditional reversal pattern. ? ? : )

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