Trade of the Day: NZD/JPY

By: Dima Chernovolov

NZD/JPY continues to fall inside the 30-minute Down Channel chart pattern, which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 6-bar level – which is the result of the medium Initial Trend and Uniformity (5 bars) and strong Clarity (8 bars). NZD/JPY is expected to fall further inside this Down Channel in line with the earlier downward reversal form the major resistance area shown below.

As can be seen from the daily NZD/JPY chart below, the price earlier reversed down from the major resistance area located between the key level 73.50 (which reversed the price sharply in January) and the upper weekly Bollinger Band. The proximity of this resistance area and the overbought weekly Stochastic increase the probability NZD/JPY will continue to fall inside this Down Channel.