NZD/JPY: Pullback Before 73.650 Will Be Achieved
Good day traders, hope you are all geared up to tackle the markets this week.
The monthly narrative is finally taking shape when compared to the last two months of price action which decided to remain sandwiched between our moving averages. After failing to muster up the strength to follow through from January's hammer candlestick; price has snapped back below the 75.000 price point which has acted as a significant level of weekly support.
More visible on the weekly, the prior two weeks have shown significant bearish momentum. The first two closed as a bearish engulfing below weekly resistance which has not occurred since the first week of February. Last week bearish momentum followed through with price peaking at the 73.630 region before a 50% retracement.
Overall, should we remain below the 75.000 weekly key level we can expect a further decline which leads us into potential setups for this week. From a daily perspective, a retracement to the highlighted region would be most favourable to execute a short on this pair as it maximises the risk:reward profile. This would be a simple breakout, retest and continuation setup with several confluences such as rejection from a weekly key level, Fib rejection and 3rd trendline bounce.
T1 - 73.650
T2 - 72.500