Technical Analysis – NZDJPY Short Term Forecast

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Technical Analysis - NZDJPY Short Term Forecast

Hi Traders! Today I am sharing with you the NZDJPY short term forecast post. In this pair, multi-time frame analysis method will be applied in order to look for all the possible evidences that support my view on the current trading timeframe and the higher timeframe. The platform in which we perform this multi-timeframe analysis is on the MetaTrader4(MT4). You can find some useful tips and hacks about the MT4 platform here. We will start our analysis from the highest timeframe now which will be the daily chart here.

NZDJPY D1(Daily) Chart Analysis – Range, Bearish Divergence, ADX Indicator

On the daily chart, the price is moving inside a range which started on 7th June 2020. This range is formed by the highs and lows reaching similar resistance and support zones. The price which is respecting these two zones has reached the top of it, respected it, and is currently moving lower. The price still has room lower towards the bottom of this range. We also have a bearish divergence that has formed between the first high that has formed on 7th June 2020 and the second high that has formed on 2nd September 2020 based on the MACD indicator, which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.

Technical Analysis - NZDJPY Short Term Forecast

 

 

NZDJPY H4(4 Hours) Chart Analysis – Parabolic Sar, ADX Indicator, Heikin Ashi Candles

Looking at the H4 chart for evidences supporting the bearish view. The first thing we can see here is the Parabolic Sar in which the dots are above the price which we may consider as  evidence of bearish pressure. 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, we may consider this as yet another evidence of bearish pressure. Also 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. Currently, it looks like a pullback is happening, once this pullback completes itself we may then expect the price to continue lower further.

Technical Analysis - NZDJPY Short Term Forecast

 

Technical Analysis & Forecast Summary

NZDJPY D1(Daily) Chart Analysis 

  • Range, Bearish Divergence, ADX Indicator

NZDJPY H4(4 Hours) Chart Analysis 

  • Parabolic Sar, ADX Indicator, Heikin Ashi Candles

 

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 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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If you have any further questions, don’t hesitate to drop a comment below!

 

Happy Trading!

Yordan Kuzmanov
Chief Trader at the Traders Academy Club

 

 

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