3 Hour Chart - NZD/JPY 18/05/2020 14:15pm
3 Hour Chart – NZD/JPY 18/05/2020 14:15pm

Technical

NZD/JPY is current trading in a sideways channel, on the 4 hour timeframe.

Recent price action shows a small falling wedge forming on the lower timeframe. A break above this wedge could see the upper trendline resistance of the channel being met shortly after.

It is important to recognise that prices must close above the mini falling wedge for this trade to be active, on the 3 hour timeframe. A candle close below within the wedge is likely to see prices falling to test the lower trendline support of the channel.

The 8-day and 20-day EMA are also showing signs of crossing to the upside, possibly providing the bullish momentum needed to push prices towards the upper trendline resistance. Prices are also supported by the daily support illustrated in Purple.

Fundamental

The Kiwi Dollar is often used as a leverage proxy to illustrated global growth.

Recently headlines in the Uk have described there being a breakthrough in a vaccine to combat Covid 19. Moreover as economies begin to kickstart again, stocks have begun recovering and business activity has begun rising.

This could be seen as the first steps towards economic recovery, thus why the NZD may experience an appreciation here.

Trade Details

Potential Entry: When/If prices close above the mini wedge, this is likely to be around 64.490.

Potential Targets:

TP164.706
TP265.090
TP365.620

Potential Stops: At around 63.990

This trade carries a risk to reward ratio of 2.14, with a maximum potential loss of 50 pips and a maximum potential gain of 120 pips. We strongly advise you place stop losses at entry once a trade is at least 15 pips in profit.

Trade Updates

  • TP1 has been achieved. Prices have reached the TP1 level at 64.706, this is around 21 pips from the proposed entry. At this point it is encouraged to move stop losses at entry and take partial profit.
  • TP2 has been achieved. Prices have reached the TP2 level at 65.090, this is around 60 pips from the proposed entry.
  • This trade has now been closed at 65.500, around +100 pips from the proposed entry. There was zero drawdown on this trade.
  • Although this trade was closed, the main initial target was met, generating +120 pips.
4 Hour Chart – NZD/JPY 19/05/2020 16:15pm