NZDJPY Makes a Bearish Cross below the 86.00 Level

NZDJPY Makes a Bearish Cross below the 86.00 Level

By: Simon Furman | Where To Trade | On:28-10-2014 10:58
Back

Key Highlights

  • Break below trend line
  • 14, 21 Moving averages make a bearish cross
  • Stochastic out of the oversold territory
  • Multi timeframe Technical analysis
  • Bears to resume driving prices

 

NZDJPY 

The NZDJPY has been on a major uptrend since the last week if August 2013, the moving averages signaled the commencement of the up trend when the 14 period moving average and the 21 period moving average managed to cross below the candle sticks and a full candle closed above them on the first week of August 2013. We got the confirmation of the trend when the moving averages made a bullish cross on the second week of November 2013.

The up trend was supported by a trend line that it touched thrice at its troughs on the last week of August 2013, the first week of February 2014 and the last week of May 2014. However we managed to break below the trend line on the third week of July this year where we saw a 100 pip sell off. That  previous up-trend line is now acting as our resistance. Price was rejected 400 pips below it. We are now well below the 86.000 major psychological level and prices are retesting whether we can get above that level again. From the daily chart it is clear that that the prices have experienced consistent rejection neat the 86.00 major level. We do not anticipate to break above it.

 

Technical analysis

Weekly charts

From the weekly charts, we get our main technical signal of the next direction that the pair will be taking in the medium term: Both the 14 period and 21 period moving averages are trading above the prices. This is a bearish indication that the bears are in control of the market prices. We should also notice that as of last week, despite the indecision dhoji candle formed and the opening of the current bullish candle, the 21 period moving average made a bearish cross above the 14 period moving average. This represents a confirmation of the down trend that is taking shape. We should therefore be anticipating the prices to take a major bearish dive as soon as they near the present major resistance at the 86.00 level.

We should also notice that the 12, 26 MACD has been consistently making lower lows and thus signaling a reversal in the uptrend is imminent.  The histogram from the MACD is now at -0.45 (negative 0.45) below the neutral zero line.

The stochastic at, 37.4, has moved out of the oversold region and indicates that we are now at neutral territory. This is an indication that the bears can resume driving down the price with ease. The RSI at 44.27 indicates that we are at neutral territory.

 

Where To Trade - NZD/JPY Weekly

 

Daily charts

From the daily chart the 14 period and 21 period moving averages are maintaining their bearish cross however, they have touched the candle sticks which is a potential signal that a reversal may be taking shape.

From the price action we can see that the price has been rejected below the 86.00 level and is currently trying to retest that level.

 

Where To Trade - NZD/JPY Daily

 

The Stochastic at 80.6, has just touched the overbought region. We can thus anticipate a short term price rejection at the 86.00 resistance and a potential resumption of the major down trend. The RSI  however, at 51.9, indicates that we are at neutral conditions.

 

Wrap up

The NZDJPY has a bearish bias on the larger time frame. The moving averages have given a bearish signal that can serve as a potential entry. In the daily charts, we are at overbought conditions and approaching a strong resistance level. Under this conditions a great strategy would be to short the pair just below the major level.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

Yen Looks Set For More Losses

Yen Looks Set For More Losses

By: Simon Furman | Where To Trade | On:01-05-2015 11:16

Japanese yen tumbled against most currencies including the Euro and the US dollar, and it looks like it might continue to head lower in the near term.

AUDUSD Remains Buy On Dips

AUDUSD Remains Buy On Dips

By: Ben Myers | Where To Trade | On:30-04-2015 11:13

Aussie dollar was one of the best performing currencies as it traded higher against most major currencies, and looks set for more gains in the short term.

USDCHF At Risk Of A Major Break

USDCHF At Risk Of A Major Break

By: Darryl Frankfort | Where To Trade | On:29-04-2015 11:09

US dollar dived sharply against the Swiss franc and other major currencies, as sellers managed to gain strength exposing a major break in the USDCHF pair in the near term.

US Dollar Poised For Further Rise Versus Yen

US Dollar Poised For Further Rise Versus Yen

By: James Ansher | Where To Trade | On:28-04-2015 10:58

Japanese yen once again failed to hold the ground and lost all the gains against currencies like the US Dollar and the Euro, which exposes it for more declines in the near future.

NZDUSD Gains Favored As It Holds Key Lows

NZDUSD Gains Favored As It Holds Key Lows

By: Oliver Miller | Where To Trade | On:27-04-2015 10:50

New Zealand dollar traded lower this past week after solid gains against the US dollar, but found support around and important area which means there is a chance of recovery in the near term.

StockPair

Press Release

YesOption Voted Best Technical Analysis by DailyForex

YesOption Voted Best Technical Analysis by DailyForex

August 12, 2014 - London, UK, - Leading online forex and binary options trading platform - www.yesoption.com has once again made the news by being awarded the prestigious award of ‘Best Technical Analysis of 2014’ ...
24option binary options broker review

24option binary options broker review

Plus500Findings.com is recently launched online to help traders decide which broker they could open an account. 24Option, one of the popular trading platform online is reviewed whether it is legitimate broker or scam. This reviews and findings are of great benefits for traders, especially for those novice ones, who are just starting in the trading industry. ...
Banc De Binary Expands Investment Research Service

Banc De Binary Expands Investment Research Service

Leading Investment Firm, Banc De Binary, which specializes in binary options trading, has added a new weekly video series and trading webinars to the investment research service that it provides to its clients. ...

Articles

Citigroup Inc. is to pay $25 million amends

Citigroup Inc. is to pay $25 million amends

Citigroup accepted to pay the amends without denying the accusation ...
Netflix added 7.1 million new subscribers

Netflix added 7.1 million new subscribers

Netflix Inc. managed to add in the last quarter of 2016 more subscribers than expected ...
The Federal Reserve Chair Janet Yellen is set to have another speech on Thursday

The Federal Reserve Chair Janet Yellen is set to have another speech on Thursday

On Wednesday, Federal Reserve Chair Janet Yellen spoke about the interest rates and about the United States' economy ...
StockPair

Featured Listings