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NZD/JPY Completes a Double Top

NZD/JPY is in a double top attempt after failing to clear last Friday's high at 88.90. It actually cracked that high to start the week, but then retreated before breaking 89.00. As we get into the second half of the 9.22 US session, NZD/JPY is completing double top pattern as seen in the 1H chart.

(NZD/JPY 1H Chart 9/22; click to enlarge)

Support after Double Top:
Now, even though it looks like a double top, the prevailing uptrend should limit your bearish outlook. Even at the moment, the 88.37 low seems to be holding even though price has cracked it. The RSI is still holding above 40, and price is above the 100-hour SMA, so the bullish bias and momentum is still in play. A rally back above 88.60 should open up a bullish continuation outlook. A break below 88.30 can expose the 87.95-88.05 area. This is a support/resistance area, and we might expect some buyers here if the NZD/JPY is still bullish.

Rising Channel within Consolidation:
When we look at the daily chart, we can see that price is rallying in a rising channel after finding support around 86.00. This rally is maintaining the bullish bias within a multi-month consolidation. With price breaking above the 200-, 100-, and 50-day SMAs last week, and the daily RSI pushing towards 70, the bullish bias has increased. If the NZD/JPY remains bullish, there is upside risk toward the 89.65-89.82 highs on the year.

Key Support:
If we do have a double top and a bearish correction, we can see that we should expect buyers around or just below the 88.00 area.  A break below 87.00 would invalidate the bullish outlook as it would break below the rising channel and the SMAs. In this bearish scenario, the 85.75-86 consolidation lows will be in sight.

(NZD/JPY Daily Chart 9/22; click to enlarge)