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NZD/JPY Testing Above Triangle

Mr. Kiwi is having a good start to the month with NZD/JPY testing above triangle pattern we identified months ago. But should we be all excited or is there some barrier barrier preventing Mr. Kiwi to jump higher?  Let’s take an Mr. Kiwi approach to find out.

Technical Analysis – NZDJPY Testing Above Triangle

Medium Time Frame

The NZD/JPY pair broke above an upward moving Ichimoku cloud on October 26th, and has been continuing above a very thin and flat cloud eversince. We have been eyeing 75.75 as we have discussed in our we identified months ago. However the pair is still trapped inside a new Triangle pattern. The good news is that on first trading day of the month, the pair is already attempting to break above it and opened above a median pivot level of 74.75.

This could signal further bullish moves towards medium-term target of 75.75 —  the 50% Fibonacci retracement level and an important resistance. 

The pivots remain on the Ichimoku cloud and 73.45 and 72.50.

NZDJPY Testing Above Triangle – Forex Technical Analysis Daily Chart

Long Time Frame

On the monthly chart, NZDJPY remains inside a thick, upward-moving cloud, indicating a long-term consolidation.

The brand new candle for November seems to be trying to to move up and away from the solid consolidation.

NZDJPY Testing Above Triangle – Forex Technical Analysis Monthly Ichimoku

The Ichimoku cloud itself is moving upward however its lower band is acting as a solid support.

Fundamentals – NZD/JPY Testing Above Triangle

Japan Side: The Bank of Japan (BOJ) decided to maintain the short-term negative interest rate at -0.10% earlier during the Asian session today. They will be carrying on with the current pace of JGB purchases so holdings can increase at an annual pace of 80 trillion JPY.

However, the policymakers of the land of the rising sun admitted that risks to economic growth and inflation are a bit to the downside, particularly when it comes to export activity and output. They mentioned that there’s still some momentum in price levels but that it weakened recently, adding that inflation could rise towards 2% in the second half of 2018.