Friday, July 24, 2020

Double Top On NZDJPY

Marco Tosoni

FХ Strategist & Financial Commentator

After setting a bottom around the half of March right below 60.00 area, the New Zealand dollar has regained some relative strength, with a strong bullish rally that brought this pair back towards 71.50 area with a double top formation set between June and July, close to the bearish gap marked on January 27th.

During yesterday’s session, anyway, after setting a new weekly top, we had a first bearish correction with the formation of a bearish engulfing candle and a daily closure around 70.90 area.

The Average True Range on his hand is still declining and it’s currently working around the 2019 lowest levels so in my opinion this element should anticipate an increase of the activity on this pair over the next few weeks.

Looking at the RSI indicator, we can detect a new bearish signal, that in combination with the strong resistance area around 71.50 should anticipate a technical correction for the Yen, at least with a short-term outlook.

The setup would be activated in case of a breakdown of yesterday’s bottom around 70.60 area. The stop loss must be placed at 71.80 above June’s top, while the target price can be expected at 69.40 around the bottom zone set on this month.

As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBHM YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.

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