NZD/JPY 4H Chart: Bullish momentum
The bearish sentiment which guided the NZD/JPY currency pair during the first half of June has changed its direction. The pair has formed a new junior ascending channel which has steered the rate higher.
The New Zealand Dollar bounced off the lower boundary of a downtrend line on July 3 and has since gained 276 pips or 3.73% against the Japanese Yen. During this period of the surge, the pair breached the 55-, 100-, and 200-hour simple moving averages.
As for the near future, it is likely that the currency exchange rate could continue moving in the junior ascending channel until its upper border is breached.
The New Zealand Dollar bounced off the lower boundary of a downtrend line on July 3 and has since gained 276 pips or 3.73% against the Japanese Yen. During this period of the surge, the pair breached the 55-, 100-, and 200-hour simple moving averages.
As for the near future, it is likely that the currency exchange rate could continue moving in the junior ascending channel until its upper border is breached.
Comment:
The New Zealand Dollar has been weakening its position against the Japanese Yen since the end of July. This depreciation started when the pair reversed from the upper boundary of a descending channel. As a result, the Kiwi has been trading in a junior descending channel since the beginning of August.
Bears momentum were stable during the past few weeks and thus pushing the currency pair to a two-year low level at the 72.30 mark.
Technical indicators on the daily time-frame suggest that the bearish sentiment is likely to continue during the following trading sessions. The nearest barrier that could hinder the bearish momentum is at 72.11 formed by the weekly PP.
Bears momentum were stable during the past few weeks and thus pushing the currency pair to a two-year low level at the 72.30 mark.
Technical indicators on the daily time-frame suggest that the bearish sentiment is likely to continue during the following trading sessions. The nearest barrier that could hinder the bearish momentum is at 72.11 formed by the weekly PP.
Comment:
A long-term descending channel has guided the price movement of the New Zealand Dollar. The decline began late January when it reversed from the upper boundary of a dominant channel.
After reaching near the lower boundary of a junior descending channel, the NZD/JPY currency pair changed it market sentiment. As a result, the rate breached the upper border of a downtrend line.
Everything being equal, it is likely that the currency exchange rate makes a correction move down for a possible confirmation of an upwards movement during the following trading sessions.
After reaching near the lower boundary of a junior descending channel, the NZD/JPY currency pair changed it market sentiment. As a result, the rate breached the upper border of a downtrend line.
Everything being equal, it is likely that the currency exchange rate makes a correction move down for a possible confirmation of an upwards movement during the following trading sessions.
Comment:
The New Zealand Dollar has been trading in two different channels against the Japanese Yen. The most important of the pattern is the junior ascending channel pattern which is currently guiding the price higher.
However, after hitting the upper boundary of the junior ascending channel, the currency pair made a U-turn south. As a result, the rate breached the three moving averages.
Given that the currency exchange rate has moved closer to the bottom border of the junior channel pattern, a breakout is likely to occur during the following trading session. Meanwhile, technical indicators flash bearish sentiment.
However, after hitting the upper boundary of the junior ascending channel, the currency pair made a U-turn south. As a result, the rate breached the three moving averages.
Given that the currency exchange rate has moved closer to the bottom border of the junior channel pattern, a breakout is likely to occur during the following trading session. Meanwhile, technical indicators flash bearish sentiment.
The New Zealand Dollar has been depreciating gradually against the Japanese Yen for the last three weeks. This movement has been bounded in a descending channel.
As apparent on the chart, the Kiwi has reached the bottom boundary of this pattern and is testing a more junior one. In addition, the solid bearish momentum which prevailed late last week has allayed today, thus sending the pair for a minor consolidation between the 55-hour SMA and a channel line.
These two factors allow to think that a reversal is due in the nearest time. This should be confirmed by a breakout of the 55-hour SMA at 75.20. The rate is likely to target the 55– and 200-period (4H) SMAs and the monthly PP near 75.80 within the following sessions.
Meanwhile, technical indicators still flash bearish signals in the short means. This means that some advance southwards may still occur until 75.40 until the expected reversal takes place.