NZD/JPY has been moving within this range since last month, and it appears that another bounce off support is expected.
Or are we about to see a breakthrough soon?
Check out the inflection points we are seeing on the 4-hour time frame:
NZD/JPY 4-hour pair Chart by TradingView
The NZD/JPY pair has been moving back and forth between support near the key psychological level at 90.00 and resistance at the 92.00 handle since October.
Relatively upbeat comments from Bank of Japan President Ueda earlier this week appeared to have kicked off another round of yen gains, as he acknowledged that the economy was continuing to recover moderately and revived expectations for a rate hike in December.
Could NZD/JPY break the range support level soon?
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on the New Zealand Dollar and Japanese Yen yet, it’s time to check the economic calendar and stay up to date with daily fundamental news!
Over the weekend, New Zealand published some upbeat inflation-related indicators, making traders skeptical that the Reserve Bank of New Zealand may announce another interest rate cut soon.
If range support holds, NZD/JPY may recover to near-term inflection points at the pivot point level (90.91) or all the way to the top of the range after the R1 level (91.58).
On the other hand, a move below range support and S1 (89.88) could pave the way for a move to the next floor at S2 (89.21) or lower.
Although there are no major releases from both Japan and New Zealand this week, do not forget that the Chinese central bank has a decision on the loan interest rate and that this may once again highlight the country’s stimulus efforts.
As always, watch out for other high-level triggers that can impact overall market sentiment, and be sure to practice proper position sizing when making any trades!