The NZD/JPY pair has recovered sharply this week after days of heavy losses!
How high can the NZD/JPY pair go before the bears appear in the forex market again?
We are heading into the daily time frame for key turning points to watch out for!
Daily currency pair NZD/JPY Chart by TradingView
Thanks to improved risk sentiment and a bit of profit taking, riskier currencies like the New Zealand dollar were able to recoup some of their losses after days of losing points to safe havens like the Japanese yen.
In particular, the NZD/JPY pair received additional support from New Zealand, which reported better-than-expected employment growth and steady high wages in Q2 2024 even as the unemployment rate rose from 4.4% to 4.6%.
Remember that directional biases and volatility 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 take a look at the economic calendar and stay up to date with the daily fundamental news!
The NZD/JPY pair, which hit 2024 lows below 84.00, posted a long wick and rose to the psychological levels of 89.00.
If the risk-on and NZD-friendly environment persists in the next couple of days, the NZD/JPY pair could attract enough buying pressure to test the 90.00 psychological level or the 92.00 area of interest near the pivot point on the daily chart, the 200 SMA and the broken trend line support.
However, if the NZD bulls fail to gain momentum, the NZD/JPY pair could find enough selling pressure around the 90.00 resistance level. The pair could return to the pivotal support point S1 (85.56) or even print new August lows in the coming days.
Watch the following candles closely for clues as to where the NZD/JPY pair will go! No matter how you choose to trade this setup, make sure you follow your trading plan and use your best risk management moves so you can trade another day!