Will 65.00 NZD/JPY Resistance Hold?

Last updated 12/15/2009 1:49 PM EST (GMT -5) 0 Comments - Add your comment

Forex Trading involves high risks, with the potential for substantial losses and is not suitable for all persons. Past performance is not necessarily indicative of future results.

Roger A. Stojsic

Technical Analyst, GFT

Since the beginning of 2009, the NZD/JPY has seen a relatively steady uptrend up having begun down near 44.0 until topping out around 69.50 toward the end of October. Prices have since dropped rather aggressively hitting a low of about 60.0 near the end of November (breaking through the 2009 bull trend line the process). Over the past couple weeks, price have rebounded and are currently testing near-term resistance near 65.0 (established earlier this week). Although this choppy action makes overall trend more difficult to determine, we still may have a solid shorter-term selling opportunity in the form of a double-top bearish Gartley pattern if current 65.0 resistance fails and prices move up to around 67.0 (see chart below). Assuming this pattern completes and no warning signs (gaps and/or long bars prior to entry) are present, we may see at least a temporary dip down to initial fib support of the projected CD leg near 65.0 (38.2% of projected CD leg) followed by 64.0 (61.8% of CD). The key will be for price to remain above point C (62.0) before reaching the projected entry of 66.80; otherwise, this specific double-top Gartley setup is no longer valid.

Potential Strategy : Sell if prices rally to 66.80 risking 67.84 targeting 65.22 (T1), 64.09 (T2).

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