NZD/JPY: All Eyes on the Channel

• The price gets caught within a channel in the H4 chart
• The H1 chart has been choppy for some days
• Higher time frames favor the Bull

NZD/JPY H4 Chart

NZD/JPY H4 Chart Trades within a Channel

The H4 chart shows that the price gets caught within a channel for some days. It had a bounce at the channel’s support yesterday. Since then it has been heading towards the channel’s resistance. Traders are to wait for the price to make a breakout followed by a breakout confirmation to find entries in the pair. Simple Moving Average has been flat for quite a while. This indicates that the pair may remain choppy and trades within that range for some days. However, the daily time frame shows that the price has been up trending by obeying a trend line. The price still stays above the trend line, which may give some advantage to the Bull to win the race here.

NZD/JPY H1 Chart

Is the H1 Chart Producing a Double Top?

The H1 chart shows that the price had a rejection at 87.000 earlier. It then made a bearish correction and headed towards the upside again. However, the level was strong enough to make the price have a strong rejection. The chart produced an Inverted Hammer followed by a bearish candle. This might attract intraday sellers to go short in the pair and drive the price towards the South. The price may find its resistance around 86.650 in intraday minor charts. However, if the H1 chart makes a strong breakout at the level, the sellers may consider it as a Neckline breakout to drive the price towards the level of 86.300.

Considering these two charts, it seems that traders may have to be very patient with the pair to be able to find good entries. The H4 chart has been very choppy and there is no sign yet to make a breakout as of writing this analysis. Higher time frames such as the Daily favors the Bull, which may give an edge to the bull to make a bullish breakout at the channel’s resistance. The H1 chart looks neutral- bearish. It may offer short entries to the sellers. However, traders are to be very cautious with their trade management.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn