NZD/JPY has been pacing back and forth inside a range visible on its 4-hour time frame.
Now that it’s closing in on the top, could it go for a breakout next?
Or will it slide back to the bottom again?
NZD/JPY 4-hour Forex Chart by TradingView
This Kiwi pair has been finding support around the 85.60 area and resistance at 88.15 close to R2 (88.45), with price within striking distance of the ceiling.
Bearish yen vibes have been in play lately, as the confirmation of new Prime Minister Takaichi has sparked strong speculations of Abenomics-style stimulus and looser BOJ monetary policy.
At the same time, improving trade sentiment ahead of the Trump-Xi meeting seems to be lifting the commodity-related Kiwi.
Can NZD/JPY sustain its climb past the range top?
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!
Reversal candlesticks around the range resistance could suggest that a selloff back to nearby support levels at R1 (87.34), the pivot point (86.34) or even the range bottom just above S1 (85.23).
On the other hand, long green candlesticks closing past R2 could confirm a breakout, possibly taking NZD/JPY to the next upside barrier at R3 (89.45) or higher.
Also look out for a potential bullish moving average crossover, as the 100 SMA appears to be making its way above the 200 SMA to hint that the path of least resistance is to the upside.
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.
Disclaimer:
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.
