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NZDJPY Approaches Key Resistance at 76.30

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The NZDJPY played out perfectly for us last December.

Most of what I do revolves around breakouts from chart patterns as well as candlestick formations such as the pin bar.

However, false breaks can be just as lucrative if not more so.

Look no further than what happened to NZDJPY between November 28th and December 14th of last year.

On November 28th, the New Zealand dollar cross broke above a long-standing descending channel.

Here it is on the weekly time frame:

NZDJPY descending channel on weekly time frame

Buyers held the pair above new support for a couple of weeks.

However, that came to an abrupt end on the 14th of December.

Here’s the daily chart:

NZDJPY false break and selling opportunity

Notice how NZDJPY closed the day back below the channel top. That was our signal to go short.

There was even a second bearish pattern in play in the form of an upward sloping flag that helped confirm the breakdown last month.

Here’s the comment I made in the member’s community:

NZDJPY member's comment

Our target was 72.40 (red line above) which was nearly 500 pips away at the time.

The aggressive selloff in late December and early January helped the pair reach our target in record time.

That brings us to the current NZDJPY price action.

Buyers are close to retesting the confluence of resistance at 76.30. It’s the intersection of channel resistance and the lows from last November.

On the surface, it appears to be an excellent area to watch for NZDJPY shorts.

However, let’s not forget what has happened here…

Like all the yen pairs, NZDJPY bounced aggressively following the January 3rd flash crash. The pair also tested critical support below the 70.00 handle.

That bounce last month may be indicative of a bottom. In which case, selling from the 76.30 area is ill-advised.

As always, it will depend on how NZDJPY behaves at 76.30 resistance over the next few sessions.

Bearish price action from here would signal a turn lower. Perhaps as far as 72.40.

Alternatively, a daily close above the 76.30 area would be bullish. It would also expose the December high at 78.80.

I think a wait-and-see approach is the best course of action at the moment.

These markets are too indecisive to trade them without some form of confirmation such as a pin bar or engulfing pattern.

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NZDJPY key resistance area

Leave a Comment:

27 comments
South Africa says

Promising. I don’t know how to thank you brother ❤

Reply
    Lekhema says

    Same here man, this guy really helped me

    Reply
Jake says

Great

Reply
    Justin Bennett says

    Cheers, Jake. Thanks for stopping by.

    Reply
Onuoha says

Thanks a million Justin

Reply
    Justin Bennett says

    You’re very welcome.

    Reply
      Guillermo angarita says

      Este caballero es un mostro gracias justin

      Reply
      LAWAL says

      You are good

      Reply
Dominique says

Nice work man. Could you do a review on Gold?

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Kenny Jay says

This previous set up , make me earn profit . i filter using daily . Thanks .

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Trần văn hiêp says

Cảm ơn Justin phân tich của bạn rất tốt cho tôi.

Reply
Geniusbami says

I see a SHS pattern here at the end of a downward trend, do you think it’s valid?

If it is, my neckline is at 72.00 and measured target at 65.80.

Reply
    Justin Bennett says

    A head and shoulders should develop after an extended move up, not down.

    Reply
OGBORO preciouslife says

Thanks brother

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Adebayo saheed says

You have be great help to humanity… Thanks

Reply
    Justin Bennett says

    You’re welcome, Adebayo. Thanks for the kind words.

    Reply
derrick says

am still confused on this pair whether to long or short it

Reply
    Justin Bennett says

    That’s an indication that you should wait for a proper setup.

    Reply
Robert says

Hi Justin
Thanks for the guide

Reply
    Justin Bennett says

    My pleasure, Robert.

    Reply
Oladimeji says

Nice one boss

Reply
    Justin Bennett says

    Cheers. Glad you liked it.

    Reply
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