Hi Traders! Today I share with you my NZDJPY technical analysis and 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 daily chart here.
On the daily chart, the price which was moving higher reached a strong resistance zone, respected it, and is currently moving lower from this zone. We also have a bearish divergence that has formed between the first high that has formed on 25th February 2021 and the second high that has formed on 10th May 2021 based on the MACD indicator, we may consider this as evidence of bearish pressure. Also based on the Volumes indicator we could see that the volumes are dropping, we may consider this as another evidences of bearish pressure. So everything looks good here for the bears and also there are no signs opposing this bearish view. We may now move down to lower timeframe and look for evidences supporting this bearish view.
Looking at the H4 chart we could see that the price has created a bearish divergence between the first high that has formed on 29th April 2021 and the second high that has formed on 10th May 2021 based on the MACD indicator, we may consider this as evidence of bearish pressure. Also based on the Parabolic Sar we could see that the dots are above the price which we may consider as another evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So the bottom line here is that the H4 chart has evidences supporting this bearish view. We may now move down to one more timeframe lower and look for evidences supporting this bearish view.
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. Also, we have a strong support zone that has formed and the price which is moving lower has broken below this zone and is holding below it, we may consider this as another evidence of bearish pressure. Currently, this strong support zone is acting as a strong resistance zone for us. Until this strong resistance zone holds my view here is bearish and I expect the price to move lower further after pullbacks.
NZDJPY D1(Daily) Chart Analysis
NZDJPY H4(4 Hours) Chart Analysis
NZDJPY H1(1 Hour) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
You will also find a pretty extensive database of educational materials here in the blog – just use the search or check out the Forex Education section above.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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