From Investor to Scalper – series of studies created in cooperation with broker BDSwiss, in which we take a financial instrument and the analysis includes a detailed look at the value from the monthly chart and ending with H1 or lower.
NZDJPY after declines lasting from January 2015, reached a very important support at 69.00 in June, which coincided with the level of 50% of the Fibonacci correction from previous six-year rises, where a demand response occurred. Rejection of this level resulted in increases that did not last too long, since February we see domination of supply.
As a result of these increases, the market reached local resistance at 83.50, where a supply response occurred.
Looking at daily chart, we can see that in the area of already mentioned level 83.50 is seen formation of double peak. As a result of later declines, the market reached the upward trend line, where a demand response occurred.
So far the increases are not very dynamic, but given that the 80.45 level has not yet been tested from the bottom (as a resistance), we would expect market to deepen this correction just in its vicinity.
However, looking at the 4-hour chart we will see that even if growth continues the first supply response would be expected to be in the area of 78.50.
On H1 chart, we will notice that the market is moving from Wednesday in a downward channel. Continuation of the upswing would therefore be possible only if the top of this formation could be broken. However, considering that the current declines are definitely less dynamic than the growth in beginning of the week, it seems more likely.
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