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Price Action Setups: NZDJPY, AUDUSD and EURNZD

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This past week saw some extremely volatile movements by several pairs including AUDUSD, GBPJPY and of course GBPAUD. It’s clear that these markets, and several others, are in transition as September has brought about an increase in volume and volatility.

There is one pair that slipped through the radar this past week that may be in the process of making a similar transition. The NZDJPY chart has a lot going on at the moment that can give us a few clues going into next week. What makes this my favorite (potential) setup for next week is that we have a very precise level to watch that could lead to a much broader shift in market sentiment.

The first thing we should note about this pair is that it ended the week back below 87.50, which could be a sign of developing weakness. The 87.50 level has acted as resistance since late July. The market was able to climb back above it on September 8th, which at the time looked promising for a retest of the 88.25 resistance level.

Instead the market was unable to maintain positive territory and closed the week below this key level.

nzdjpy daily forex chart

The NZDJPY 4 hour chart gives us some great insight into a possible entry point. It’s clear to see that channel support has been well-respected on a 4 hour basis. Therefore we can look for a close below this level as a viable setup.

nzdjpy 4 hour forex chart

Lastly we have the NZDJPY weekly chart. As you can see we have a bearish pin bar below our key level with a lot of room to run. This isn’t to suggest that there is a lack of support, because we all know better than to think that, but rather that we may be looking at the start of a larger move down.

nzdjpy weekly forex chart

Summary: Watch for a possible break below channel support on a 4 hour basis. From there we can trade a retest of new resistance (former channel support). The next key support level comes in at 85.85.

Note: All of the above means nothing if the pair rallies higher next week. In which case this trade setup would temporarily be put on hold. 

nzdjpy 4 hour forex chart

AUDUSD analysis

audusd daily forex chart

EURNZD analysis

Weekly chart

eurnzd weekly channel-blur

Daily chart

eurnzd daily forex chart

 

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2 comments
    Justin Bennett says

    Hi mistertrading,

    Thank you for the kind words, and you’re very welcome.

    – Justin

    Reply
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