NZD/JPY started its downtrend rally in the mid of 2016. It made a strong reversal pattern of round bottom formation, but was not able to make a bullish crossover above the resistance of 83.741.
Then it tried to make a trend reversal by forming an inverse head and shoulder pattern. Still, it was not able to make a bullish crossover. Two strong bullish reversal patterns have been negated by the bears which indicate their strong confidence.
It was then followed by a continuation pattern of descending triangle, the highs (peaks) reduced constantly, but the lows (troughs) remained constant. It indicates that the bulls are not confident to buy at higher levels.
If you are a moving average trader, then you can clearly see that the pair has consistently traded below 200 SMA too and it is acting as a strong resistance. Recently the pair witnessed strong rejections from 21EMA level with a gravestone doji. Both these are strong downtrend indications.
Knockout vs Counterattack
The pair has made a breakout below the long term support levels of 75.954. It was then followed by a hammer candlestick which indicate a fight back from bulls. So this week's closing price is going to make a long term impact on the counter. If it fails to close with a strong bull candle above the support zone, then the long awaited downward move becomes inevitable.
Seems like an exciting final on the cards now. Bull’s counterattack vs bears knockout blow!! Stay tuned with us for more updates.
Chart time: Weekly
Yellow line:200 SMA
White line:21 EMA
Pink:Support,Resistance and Trendline
Then it tried to make a trend reversal by forming an inverse head and shoulder pattern. Still, it was not able to make a bullish crossover. Two strong bullish reversal patterns have been negated by the bears which indicate their strong confidence.
It was then followed by a continuation pattern of descending triangle, the highs (peaks) reduced constantly, but the lows (troughs) remained constant. It indicates that the bulls are not confident to buy at higher levels.
If you are a moving average trader, then you can clearly see that the pair has consistently traded below 200 SMA too and it is acting as a strong resistance. Recently the pair witnessed strong rejections from 21EMA level with a gravestone doji. Both these are strong downtrend indications.
Knockout vs Counterattack
The pair has made a breakout below the long term support levels of 75.954. It was then followed by a hammer candlestick which indicate a fight back from bulls. So this week's closing price is going to make a long term impact on the counter. If it fails to close with a strong bull candle above the support zone, then the long awaited downward move becomes inevitable.
Seems like an exciting final on the cards now. Bull’s counterattack vs bears knockout blow!! Stay tuned with us for more updates.
Chart time: Weekly
Yellow line:200 SMA
White line:21 EMA
Pink:Support,Resistance and Trendline