Looking forward to sell NZDJPY as the pair approaches critical resistances

Today we have a lot of interesting opportunities as the fed decision to keep asset purchases unchanged influenced the market a lot. I am bearish on NZDJPY for some time now, and I think we should be looking to sell NZDJPY. I believe every rally should present a sell opportunity as the pair is heading towards critical resistances as shown in the daily chart below. RSI is also aiming extreme on the daily chart, which adds value to our bearish view.

The pair is also creating a beautiful Harmonic butterfly pattern on the daily chart as shown below, which I think will complete soon, and then the pair may continue to move lower again.

In order to enter a sell trade for NZDJPY, we need the pair to stop at any of the resistances, and then create a clear divergence on the 4 hour chart. Once the pair creates a divergence, then we will enter a sell trade with a bearish candle pattern on the 1 hour chart. We need to be very careful before entering as the pair may have a final push to the upside, before moving down again. Initial target should be around 81.20, and final target could be around the daily 20 moving average. Stop should be placed above the previous high.

Reviewing yesterday’s events and trades
Yesterday, as mentioned earlier turned out be a very important day as Fed kept the asset purchases unchanged. Since, market was pricing in a reduction of USD 5-10B, and there was no reduction announced, which caused US dollar to dive down. All risk correlated currencies jumped across the board, including EURUSD, NZDUSD, GBPUSD and AUDUSD. GOLD and SILVER traded higher as well with after the release. In short, US dollar weakened substantially across the board.

Fundamental Outlook for the day
Today US dollar may weaken further if risk holds the ground. Later in the NY session, US initial jobless claims, US existing home sales data and Philadelphia Fed Manufacturing index is scheduled. If Jobless claims data misses the expectations, then it may further cause the US dollar to slide. Other than this, Canadian wholesale sales data is also lined up, which is expected to show improvement, and can further cause CAD to rally against US dollar. Be very careful trading this week, as there can be some more emotional spikes in the market, which can be surprising.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, EURGBP, EURCAD, NZDUSD, AUDNZD, EURNZD, USDZAR, USDTRY, DOLLAR INDEX, GOLD, SILVER and INDICES.
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!