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Forex: Ideas You Can Trade- NZDJPY on Median Line of Bullish Uptrend

Posted by Steven Hatzakis on Jan 21, 2014 8:01:00 AM

NZDJPY: Medium Term  Bullish Trend Intact as Price Continues Back To Middle of Channel

The daily candle chart below shows the price history of New Zealand dollar (NZD) versus the Japanese yen (JPY) over the medium term. This currency pair is known as NZDJPY and is trading currently near 86.95 (as of publication) and just off the highs 87.18 in today's session. 

The last time the pair was covered in this series, the bullish theme was reiterated while citing a potential reversal under 84.00 which thereafter occurred as expected.  

The general theme of chart below has been along a medium term bullish channel (point 5 in white on chart), and the NZDJPY pair has again returned to the median line in the middle of this bullish channel as the momentum upwards appears to be continuing. 

Traders may buy on a very-short term dip, whereas, buyers above current levels could look for resistance previously encountered near 87.48 on January 14th 2014. The bullish momentum of the last few sessions appears along a slope similar to previous such very short term bullish momentum (such as on point 3 in yellow), whereas a potential pullback could unfold down a theoretical bearish resistance line (such as the last one drawn in red on the right of the chart -point 4).

 Below are examples of how to trade a bullish continuation or a bearish reversal:

1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 87.60 with a Limit to take profit @ 88.09 and a stop-loss @ 87.29 Risk/Reward Summary:  Limit risk = +49 pips profit / (-31)  Stop-loss risk = Gain to Loss ratio =  1.58

2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 86.49 with a Limit to take profit @ 86.21 and a stop-loss @ 86.71  Risk/Reward Summary:  Limit risk = +28 pips profit / (-22) Stop-loss risk = Gain to Loss Ratio = 1.27

Medium term daily candle chart:

nzdjpydaily january 21 2014 note

 

 

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