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NZD/JPY Testing Key Resistance Area

The NZD/JPY looks like it is forming a price bottom, but don't be so quick to jump on a bullish reversal just yet.

NZD/JPY Daily Chart 10/5


(click to enlarge)

The daily chart chart shows that after just missing 72.00 in late August, NZD/JPY has been consolidating throughout September. As we begin October, we are seeing some first signs of bottoming. However, I think it is premature to call this a reversal yet .I think the resistance around 78.80 will be key especially as the daily RSI comes back to 60. I would anticipate a push back towards the 76.00 handle.

If price pushes back under 76.00, NZD/JPY should still be bearish. If price stays above 76.00, then I would start to consider the possibility of a price bottom in NZDJPY, or at least a push to the 80.60-81.00 support area of the previous consolidation range in July-August. Here, price would also be challenged by a falling trendline coming down from April's high.