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NZDJPY has recently witnessed fresh highs at $72. Since then, there has seen a pullback towards the $70 area as the pair is now consolidating.
As prices are currently engulfed in the Ichimoku cloud, we now look to a break out from the 38.2%/23.6% Fibonacci range.
The double divergence on the momentum indicator hints to a move below the 38.2% Fibonacci. Further weakness could see another test at the psychological $70 zone.
However, should a bounce occur at 38.2%, then another test at the recent resistance level at 23.6% could be expected. This could then lead prices towards the recent fresh highs once the $71 level is cleared.
The 1-hour chart indicates prices are ranging in a sideways pattern. A short-term Fibonacci (71.974/69.869 leg) retracement shows confluence levels on the longer-term Fibonacci.
As we look for a breakout, we have seen valid support from both 38.2% Fibonacci legs.
However, the current momentum indicator shows an attempt to cross into higher values, forming a poten...
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