I see that the classic breakout and retest setup is already playing out on the hourly NZD/JPY chart.
Is it too late to jump in or is there still plenty of room for the couple to climb?
As you can see from the chart below, the price is just starting to find some buyers in the area of interest and the Fibonacci retracement level.
Trade forex for one hour for the New Zealand dollar / Japanese yen Planned by TV
In particular, NZD/JPY appears currency strength And the bounce off the support at 50% Fibonacci, which is right around the previous resistance area.
A larger decline could take it down to the 61.8% retracement level near the key psychological mark of 83.00, but that could be the line in the sand for an upward correction.
In other words, a break below this could indicate that the bears have taken over, so it might make sense to exit a long position if the pair drops below 83.00.
Technical indicators indicate strong odds for a continuation of the bullish trend, although Stochastic is heading north, while the 100 SMA is above the 200 SMA.
In addition, the gap between the moving averages is widening to reflect the strength of the bullish pressure. In this case, the NZD/JPY could make its way to the swing top after the 85.00 mark.
Risk appetite has been very fragile these days, which explains why the low-yielding yen has soared against the higher-yielding commodity currency.
However, the shift towards fundamentals and central bank biases may encourage more bulls on the kiwi.
Besides, traders may also be keen to lock in profits from risk aversions stemming from concerns about the debt ceiling, possible recession in the US, and regional banking crisis. After all, it is almost the end of the week, so market players may want to stay away from potential gaps into the weekend!
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