Daily Price Action

NZDJPY Breaks Seven-Year Trend Line, Targets 69.00


NZDJPY has broken below trend line support that extends from the 2009 low at 44.14. To most, this is known as the “2008 crisis low,” referring to the 2008/2009 financial crisis that rocked global markets.

For those who have followed me throughout 2016, yesterday’s break shouldn’t have come as a surprise. I wrote about NZDJPY at the beginning of the year as part of my top trade ideas for 2016. In it, I mentioned the probability of such a break along with the massive potential it would expose.

This potential is especially old news for my members who have had to endure me talking about another retest of the 47 area for a year and a half now.

That may sound lofty, and I suppose it is, however, when viewing the monthly chart since the year 2000 the idea of an eventual move to 47 doesn’t seem so infeasible.

NZDJPY seven-year trend line support

As you can see from the monthly chart above, the current rally off of the 2009 low looks eerily similar to the price action between late 2000 and mid-2008; and we all know how that ended.

Of course, I’m not saying that the pair will drop 2,600 pips from current levels. Nobody knows for sure what will happen. But based on the price action in the chart above, I have no reason to believe that it won’t.

So with this bearish bias in mind, we can begin identifying key support levels along the way. The first of which comes in at 69.00, a level which served as support in 2006 and subsequently acted as a critical resistance area between 2009 and 2012.

The 69 handle also happens to be the 50% Fibonacci retracement level when measuring from the 2009 low to the 2014 high. A break below that would target the 63.30 area.

To sum up, I still prefer watching for short opportunities across the yen pairs as I believe we are only scratching the surface of what 2016 has to offer. And if yesterday’s NZDJPY break of trend line support is any indication, the recent surge in the Japanese yen isn’t about to let up anytime soon.

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NZDJPY key technical break on the daily chart

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