Hi Traders! NZDJPY technical analysis and short term forecast post is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. 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! Now, let’s start our analysis from the highest timeframe which will be the H4 chart here.
NZDJPY H4(4 Hours) Chart Analysis – Key Resistance Zone, Bearish Divergence, Lower Lows, ADX Indicator
On the H4 chart, the price which was moving higher was blocked by a key resistance zone formed by the 100% (88.356) Fibonacci expansion level of the first wave. Also, we could see that the price which was moving higher has created a bearish divergence between the first high that has formed at 87.507 and the second high that has formed at 87.867 based on the MACD indicator which we may consider as evidence of bearish pressure. The price then moved lower and broke below the last low at 86.383 thus creating lower lows which is a sign of gaining momentum to the bearish side. 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 everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
NZDJPY H1(1 Hour) Chart Analysis – Heikin Ashi Candles, Bearish Trend Pattern, ADX Indicator
On the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. In addition to this, 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. Also, 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. So based on all this, until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further after pullbacks.
Technical Analysis & Forecast Summary
NZDJPY H4(4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence, Lower Lows, ADX Indicator
NZDJPY H1(1 Hour) Chart Analysis
- Heikin Ashi Candles, Bearish Trend Pattern, 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 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.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
