NZD/JPY is still stuck in its holding pattern, but it looks like the triangle formation is approaching breakout conditions.
Which way will the pair go?
Better keep tabs on these crucial inflection points and potential targets on the 4-hour time frame:
NZD/JPY 4-hour Forex – Chart Faster with TradingView
Shifting market sentiment on account of the geopolitical back-and-forth in the Middle East has been keeping traders on edge for the last few weeks.
The resulting energy crisis has also kept central banks’ hands tied, forcing the likes of the RBNZ and BOJ to choose between a rock and a hard place when it comes to adjusting monetary policy.
Still, safe-haven flows are leaning slightly in favor of the lower-yielding yen for the time being, dragging NZD/JPY close to its triangle bottom.
Will we see a breakdown soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the New Zealand dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The pair looks ready to test support near S1 (92.30), so look out for long red candlesticks confirming that Kiwi bears have won the upper hand. If so, NZD/JPY could set its sights on the next downside targets at S2 (91.57) then S3 (91.02).
Reversal candlesticks at the triangle bottom, on the other hand, could point to a possible bounce to the resistance near the 200 SMA dynamic inflection point.
Sustained bullish momentum could even trigger a break higher, potentially lifting NZD/JPY to the bullish levels at R1 (93.39) then R2 (93.94) that lines up with a major psychological mark and the monthly highs.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Promoted: The Analysis & Strategy are only half the Battle; Your Mindset is the Rest.
Today’s chart art focuses on NZD/JPY’s descending triangle. But as any pro will tell you, even the cleanest technical setup can fall apart if the trader doesn’t stay disciplined when price starts testing the level.
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Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
