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 – Strong Resistance Zone, Bearish Divergence, Stochastic Oscillator
On the H4 chart, the price reached a strong resistance zone formed by the previous swing highs, respected this zone and bounced lower from it. Also, we could see the price has created a bearish divergence between the first high that has formed on 18th October 2022 and the second high that has formed on 8th November 2022 based on the MACD indicator. We may consider these as signs indicated by the market that the buyers are losing control and the sellers are currently having the upper hand. In addition to this, based on the Stochastic Oscillator we could see that the price has reached its extreme (80 level) which we may consider as another signs favoring the sellers. So based on all this, everything looks good here for the bears and we may now move down to lower timeframe and see if we can find evidences supporting this short term bearish view.
NZDJPY H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Two Strong Resistance Zones
On the H1 chart, the price has created clear waves of bearish trend pattern in the form of three lower highs, lower lows structure. We may consider this as a sign indicating that the price is gaining momentum towards the bearish side. Generally, after a bearish trend pattern, we may expect pullbacks and then further continuation lower. Currently it looks like a pullback is happening. In addition to this, we had two strong support zones that has formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (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.
Technical Analysis & Forecast Summary
NZDJPY H4(4 Hours) Chart Analysis
- Strong Resistance Zone, Bearish Divergence, Stochastic Oscillator
NZDJPY H1(1 Hour) Chart Analysis
- Bearish Trend Pattern, Two Strong Resistance Zones
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
