NZD/JPY Price Analysis: Bulls stepping in at a critical confluence of support

This article was originally published on this site

  • NZD/JPY carving out a support structure on the 4-hour 21-EMA.
  • Bulls are in anticipation of a fresh daily bullish impulse to higher highs. 

As per the prior Asian session’s analysis, NZD/JPY Price Analysis: Bulls lurking at daily and 4-hour support, there are bullish prospects from support structures.

However, since the initial analysis, while the price has moved in the expected trajectory …

Prior analysis 

Live market

… the price has formed new support structure above 77.40 in the process at a well worn historic level as follows:

In the above 4-hour chart, the price tested the prior 23 June lows and was rejected there a number of times.

Also, the price has formed a supporting structure within the bullish impulse near 77.60. 

There is also a confluence of the 21 EMA.

Moreover, zooming all the way out to the weekly chart, we can see that this is in fact a key level on the higher time frames also:

Weekly chart

Therefore, the original area of support structure from which bulls may have been expecting a discount may now be superseded by the newly formed support structure.

There is a high probability that the price will move higher from here.

A long position can be entered for a 1:3 risk to reward opportunity with a stop loss protecting the position from below the subsequent support structure.