NZD/JPY forms "gravestone doji after dropping resistance 75.920
The pair rallied from yesterday's lows of 73.947 to today's highs of 75.920 levels.
That is where it has rejected the resistance and now struggling to hold onto the current levels of 75.370 also. In this process, it has formed a "gravestone doji" candle pattern at the peaks of 75.517 with considerable volume generation.
As shown on the intraday charts, soon after the rejection of above mentioned resistance it has formed this bearish pattern. At this juncture, the valuations became extremely skeptic and began correcting as you can observe how the bearish behavior in price of this pair after approaching this level in the recent historical evidences (see yellow colored circled areas).
More importantly, the oscillators have begun diverging to the recent rallies.
RSI at around 60 levels which is near overbought territory is diverging to the previous upswing rallies, this would mean that selling pressures are piling up and previous spikes are only deemed as the result of short covering rallies.
Subsequently, an attempt of %D crossover above 80's intensifies bears interests in the market, as a result we've seen today's lows at 75.366.
The current spot prices on daily charts have again slipped below 21DMA which is again one more bearish indication. However, closing basis should be closely monitored.
If it does not manage to hold onto the current level of 75.370 we could only see near strong support only at 74.50 levels. Even if it shows upside potential holders CFDs would still be safe as in medium term it has again to drop back considering prevailing technical conditions.
Kiwi fundamentals have still not been convincingly improved which are not that conducive NZD bulls and hence, we maintain long term bearish trend of this pair.
Considering the above aspects, we recommend deploying one touch binary puts in our strategy in order to extract leverage on extended profitability along with the spot FX dips upto 74.500.
On speculative grounds, at current spot FX levels of 75.370 one touch delta puts are recommended for minimum targets of 35-40 pips, the prime merits of such one touch option are high yields during high volatility plays, 1W NZDJPY ATM vols are flashing at 16.8%.
That is where it has rejected the resistance and now struggling to hold onto the current levels of 75.370 also. In this process, it has formed a "gravestone doji" candle pattern at the peaks of 75.517 with considerable volume generation.
As shown on the intraday charts, soon after the rejection of above mentioned resistance it has formed this bearish pattern. At this juncture, the valuations became extremely skeptic and began correcting as you can observe how the bearish behavior in price of this pair after approaching this level in the recent historical evidences (see yellow colored circled areas).
More importantly, the oscillators have begun diverging to the recent rallies.
RSI at around 60 levels which is near overbought territory is diverging to the previous upswing rallies, this would mean that selling pressures are piling up and previous spikes are only deemed as the result of short covering rallies.
Subsequently, an attempt of %D crossover above 80's intensifies bears interests in the market, as a result we've seen today's lows at 75.366.
The current spot prices on daily charts have again slipped below 21DMA which is again one more bearish indication. However, closing basis should be closely monitored.
If it does not manage to hold onto the current level of 75.370 we could only see near strong support only at 74.50 levels. Even if it shows upside potential holders CFDs would still be safe as in medium term it has again to drop back considering prevailing technical conditions.
Kiwi fundamentals have still not been convincingly improved which are not that conducive NZD bulls and hence, we maintain long term bearish trend of this pair.
Considering the above aspects, we recommend deploying one touch binary puts in our strategy in order to extract leverage on extended profitability along with the spot FX dips upto 74.500.
On speculative grounds, at current spot FX levels of 75.370 one touch delta puts are recommended for minimum targets of 35-40 pips, the prime merits of such one touch option are high yields during high volatility plays, 1W NZDJPY ATM vols are flashing at 16.8%.
