Technical and trading outlook: USD/JPY, NZD/USD

Weekly USDJPY technical outlook

(AceTrader Team)

Trend daily chart

Sideways

Daily Indicators

Bearish divergences.

21 HR EMA

133.61

55 HR EMA

134.47

Trend hourly chart

Down

Hourly Indicators

Turning up

13 HR RSI

40

14 HR DMI

-ve

Daily analysis

Consolidation b4 one more fall.

Resistance

135.11 – Last Wed’s low (now res).
134.59 – Last Fri’s NY high.
133.91 – Minor hourly sup (now res).

Support

132.98 – Minor sup.
132.51 – Last Fri’s 7-week low.
131.50 – Jun 17 low.

USD/JPY – 132.24.. Although dlr staged a recovery fm 135.90 (Mon) to 137.46 Wed after expected 0.75% Fed’s rate hike, price quickly tumbled on less hawkish comments by Fed’s Powell n later fell to a 7-week trough of 132.51 on Fri.

On the bigger picture, dlr’s spectacular rally fm 2011 historic low at 75. 32 (Mar) due to co-ordinated CCY intervention by G7 central banks to weaken the yen in the aftermath of Japan’s earthquake and tsunami of Mar 2011 to as high as 125.86 (2015) confirms major low has been made. Although the pair fell back to 99 .00 in mid-2016 n swung broadly sideways until 2021, price rallied in tandem with U.S. yields to a 24-year peak of 139.39 in mid-Jul b4 retreating. Last week’s selloff below 135.58 sup n Fri’s close below confirm long-overdue correction has taken place n would head to 131.50, possibly 130.00 but 129.50 would hold. Only a move back abv 135.58 signals pullback over n yields gain twd 137.46.

Today, despite Fri’s impressive short-covering rally fm 132.51 (Europe) to as high as 134.59 in NY morning, subsequent fall to 133.22 suggests recovery is over n below 132.51 may extend to 131.90/00, bullish convergences on hourly indicators should keep price abv 131.50. Only abv 134.59/67 risks 135.00/10.

NZD/USD: Intermediate ending diagonal likely to complete primary impulse

(Jing Ren – Orbex)

The current NZDUSD structure on the 1H timeframe suggests the formation of a new bearish trend, which may take the form of a primary impulse ①-②-③-④-⑤. This impulse can give rise to a global zigzag a-b-c of the cycle degree.

Perhaps the first four parts of the potential impulse are fully completed. In the near future, it is expected to decline in the sub-wave ⑤ to 0.585. This sub-wave can take the form of an intermediate ending diagonal (1)-(2)-(3)-(4)-(5)

At the specified level, wave ⑤ will be at 123.6% of primary impulse ③.

Alternatively, it is assumed that the market continues to build a large bullish zigzag of the cycle degree, as part of which correction b has come to an end. The final primary wave Ⓩ, which is part of correction b, took the form of a triple zigzag (W)-(X)-(Y)-(X)-(Z) of the intermediate degree.

Thus, in the next coming trading weeks, price growth and the development of a bullish cycle wave c above 0.721 are possible. Wave c is likely to take the form of an impulse ①-②-③-④-⑤. At the specified price point, the construction of the primary impulse wave ③ is likely to end.

The level of 0.721 is the previous maximum marked by the primary wave Ⓧ, which is not visible on the current chart.

Read Trading Forecast: EURUSD, USDCAD