Daily Price Action

NZDJPY: Friday’s Close Presents New Range


The yen lost significant ground last week causing several pairs including the NZDJPY to rally. Following a brief setback between Wednesday and Thursday of last week, buyers lifted prices above the key 80.60 handle ahead of Friday’s close.

Apart from the price action in mid-August, the 80.60 area doesn’t appear to carry much weight. That is, until we look back at the range that was carved out between mid-December of 2016 and early March of this year.

NZDJPY daily time frame support level

After studying the chart above, there’s little doubt that 80.60 is important. With this in mind, Friday’s close above this key level could be a sign of what’s to come.

However, this is a situation where I won’t commit to a position without confirming price action. It’s going to take bullish price action following a retest of 80.60 as new support to get my full attention.

The reason for this is twofold. On the one hand, the NZDJPY is currently trading 140 pips above the mean as measured by the 10 and 20 EMAs. Therefore, a further pullback into the 80.60 area is likely.

My second reason for requiring confirming price action has to do with volatility. The yen pairs are known to be more volatile than other pairings, and the past six sessions have been no exception.

To the upside, we have the 82.00 handle. The area attracted buyers throughout July and also rejected the August 4th attempt to reclaim the level for the bulls. If I miss an entry near 80.60, I will look to 82.00 for signs that buyers maintain control.

On the flip side, should sellers manage a daily close (5 pm EST) back below 80.60/70, it would negate the long idea and expose the current September lows at 78.25. I won’t dismiss a selling opportunity if this happens, though it would depend on how it unfolds.

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NZDJPY daily time frame showing new range

Leave a Comment:

TJ says

The long upper wick on today’s daily chart at 61.8% right into the long lower wick of 07/18, previous broken support may suggest a pull back into 80.60

    Justin Bennett says

    True enough. We’ll know shortly.

phornniwat keawkanya says

Thanks Analysis Techniques

    Justin Bennett says

    You’re welcome.

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