NZD/JPY: negative outlook
By Dima Chernovolov
• NZD/JPY reversed from the powerful resistance zone
• Likely to fall further to 84.00 and 80.00
NZD/JPY has been falling sharply from the start of this year – after the pair reversed down from the powerful resistance zone surrounding the major multi-year resistance level 95.00 (which also previously reversed the pair in July of 2007, as you can see from the monthly NZD/JPY chart below). This resistance zone was strengthened by the upper monthly Bollinger Band. The downward reversal form this resistance area completed the primaryⒸ-wave of the long-term II wave from the start of 2009.
If the pair closes this month at the current levels, it will then form the strong Japanese candlestick reversal signal – monthly Evening Star – which will heighten the likelihood of further losses toward the next support levels 84.00 and 80.00.