Kiwi bulls are defending the bottom of the short-term range on NZD/JPY so far. Are they setting their sights on the resistance next?
Long NZD/JPY Idea
The pair has been bouncing back and forth between support around 70.10 and resistance at 71.30, and it looks like the bottom of the range is holding once more. In that case, price could make its way back to the resistance from here.Stochastic is on the move up to confirm that bullish pressure is present, but the oscillator is already approaching the overbought zone to signal potential exhaustion among buyers.
Earlier today, RBNZ head Orr confirmed that the New Zealand economy is in a good position, even with risks stemming from the coronavirus outbreak. He also mentioned that inflation is within the midpoint of their target range, dashing hopes that the central bank might need to cut rates soon.
The quarterly PPI is up for release later in the day, and stronger than expected numbers could encourage more Kiwi bulls to charge. On the flip side, downbeat results might lead to a break of the range support.As for the yen, it appears that counter currency flows and market sentiment are its main drivers at the moment. So far, risk appetite has been supported while coronavirus fears subside.
I haven’t set actual entry orders yet, but I’m hoping to jump in on another dip to the range support then aim for the resistance next.
As for my stop, I’ll base it on the average daily volatility of NZD/JPY, which is close to 60 pips. This should be good for roughly 2:1 return-on-risk.
What do you guys think?
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