Hi Traders! Today I share with you my NZDJPY technical analysis and short term forecast post, we do our analysis on the MetaTrader4 platform (MT4). Some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on this pair in order to find possible trading opportunities. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the H4 chart here.
NZDJPY H4(4 Hours) Chart Analysis – Range, Key Support Zone, Bullish Divergence, RSI Indicator
On the H4 chart, after the strong bullish move currently it looks like a correction is happening in the form of a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is moving inside this range has currently reached the bottom of this range. While measuring the big and small wave inside this range using the Fibonacci expansion tool, the 100%(82.729) Fibonacci expansion level of the big wave and the 100%(83.399) Fibonacci expansion level of the small wave coincides with the bottom of the range which makes this area a key support zone for us. The price respected this key support zone and is currently bouncing higher from this zone. In addition to this, we have a bullish divergence that has formed between the first low that has formed at 83.141 and the second low that has formed at 83.013 based on the MACD indicator which we may consider as evidence of bullish pressure. Also, we have this bullish divergence on the RSI indicator as well which we may consider as yet another evidence of bullish pressure. So based on all this, my short term view is bullish here and we may now move down to lower timeframe and look for evidences supporting this bullish view.
NZDJPY H1(1 Hour) Chart Analysis – Bullish Convergence, ADX Indicator
Looking at the H1 chart, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 83.151 and the second low that has formed at 83.013 based on the MACD indicator. The price then moved higher and broke above the last high at 83.916 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidences of bullish pressure. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a correction is happening. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Also, currently there are no signs opposing this short term bullish view. Until the key support zone shown in the image below (marked in blue) holds my short term view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
NZDJPY H4(4 Hours) Chart Analysis
- Range, Key Support Zone, Bullish Divergence, RSI Indicator
NZDJPY H1(1 Hour) Chart Analysis
- Bullish Convergence, ADX Indicator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
