By: DailyForex.com

The NZD/JPY pair fell during the bulk of the session on Tuesday, testing the 86.80 region. However, as we have a New Zealand employment number announcement coming out during the session today, the fact that the New Zealand dollar would take a little bit of a break wouldn’t be that big of a surprise in my opinion. In fact, I think that the market is essentially waiting to get that announcement before trying to make a move higher.

Yes, I see that it has sold off recently, but ultimately I think it’s only a matter of time before we see the buyers step back into place, especially considering that we are getting close to the end of the consolidation range as the 86 level has been so supportive. I think that any type of supportive action in that region has to be considered a decent buying opportunity, as the risk to reward ratio is so good.

Summer time trading could make range trading very simple.

The fact that we are in the dead of summer could make this range trading even easier, simply because the markets will have the wherewithal to make a massive move in one direction or the other. A move below the 86 handle of course is very negative, but I don’t know that we will see that in the short term. We could just get a nice bounce from here that could be capitalized on, as the range is obvious to everyone out there.

On the other hand, if the market breaks down below the 86 handle, I think that the 85 level will be tested almost immediately. That area should be rather supportive as well, so I would even be willing to buy a supportive candle in that vicinity as I think we could use that as a springboard. If we get below that level, we could go much lower, perhaps testing the 82.50 level after that. At the end of the day though, I still believe that the consolidation is probably what we are going to see a continuance of, and as a result I am bullish.

NZDJPY 8614

Related Articles
  1. Stock Analysis

    Drone Wars: DJI Vs. Intel (INTC)

    Find out which drone technology leaders, Intel Corporation or DJI Innovations, is most likely to emerge victorious in the coming drone wars.
  2. Sectors

    2016's Most Promising Asset Classes

    Find out which asset classes are considered to be the most promising for generating portfolio returns and reducing volatility in 2016.
  3. Stock Analysis

    4 Best Drone Stocks to Invest in for 2016 (AMBA, ESLT)

    Find out which companies' stocks are set to lead the growth of the potential $100 billion industry of drone makers in 2016 and beyond.
  4. Mutual Funds & ETFs

    Top 5 Wellington for Retirement Diversification in 2016

    Discover the top five Wellington Management funds for retirement diversification in 2016, with a summary and performance details of each fund.
  5. Mutual Funds & ETFs

    3 Morgan Stanley Funds Rated 5 Stars by Morningstar

    Discover the three best mutual funds administered and managed by Morgan Stanley that received five-star overall ratings from Morningstar.
  6. Economics

    4 Countries Pleading for Higher Commodity Prices

    Discover what countries are struggling the most from the price collapse in commodities and what these countries require to return to economic growth.
  7. Stock Analysis

    The Top 5 Gold Penny Stocks for 2016

    Discover five penny stock gold miners that are well-positioned to profit in 2016, providing opportunities for investors to make significant gains.
  8. Economics

    3 Reasons Iran is Important in 2016

    Learn about how the global economy and Iran will be affected by the recently lifted trade embargo and sanctions from Iran, and what it means for 2016.
  9. Sectors

    3 Cyclical Industries To Exploit in 2016

    Learn about the three industries at the down end of their business cycles, and discover how these industries may improve in years to come.
  10. Mutual Funds & ETFs

    Top 3 Voya Funds for Retirement Diversification in 2016

    Learn about Voya Investment Management's mutual fund offerings and the three Voya funds to consider for retirement diversification in 2016.
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  3. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  4. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  5. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  6. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center