NZD/JPY has been cruising inside this range since last month, and it looks like another bounce off support is due.
Or are we about to see a breakout soon?
Check out these inflection points we’re watching on the 4-hour time frame:
NZD/JPY 4-hour Forex Chart by TradingView
NZD/JPY has been pacing back and forth between support near the 90.00 major psychological mark and resistance at the 92.00 handle since October.
Relatively upbeat remarks from Bank of Japan (BOJ) head Ueda earlier this week seems to have kickstarted another round of yen rallies, as he acknowledged that the economy continues to recover moderately and revived expectations of a December hike.
Can NZD/JPY break below its range support soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the New Zealand dollar and Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Over the weekend, New Zealand printed a couple of upbeat inflation-related indicators, keeping traders doubtful that the RBNZ could announce another interest rate cut soon.
If the range support keeps holding, NZD/JPY could recover to the near-term inflection points at the pivot point level (90.91) or all the way to the top of the range just past R1 (91.58).
On the other hand, a move below the range support and S1 (89.88) could clear the way for a move to the next floor at S2 (89.21) or lower.
Even though there are no major releases from both Japan and New Zealand this week, don’t forget that China’s central bank has its loan rate decision lined up and that this could put the spotlight back on the country’s stimulus efforts.
As always, watch out for other top-tier catalysts that could impact overall market sentiment, and make sure you practice proper position sizing when taking any trades!
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