NZDJPY on the weekly time frame has just completed its corrective structure of a minor degree after falling from its highest highs i.e 80.17, taking an exit from its overbought conditions and fixing its relative strength index. If we talk about the wave structure from daily aspect, then under minor degree of wave principles, the pair is on a run for bullish correction with wave 'a' in progress. But lets broaden the vision of observation here and call it a correction of higher degree i.e 'ABC' which indicates a bullish 5 wave structure continuation in process. Both of the scenarios suggest that NZDJPY is going for a hawkish projection. EMA200 is located exactly where the market went for a reversal on the daily chart, supporting the demand zone with more buying probabilities. We have a strong support at 75.90 with high demand and liquidity affirmation for bulls pacing their trades towards EMA50 in daily as their first target. 

BULLISH AND BEARISH POSSIBILITIES / CONDITIONS :

Extending our Fibb retracement levels under daily and weekly time frame from 80.18 to 68.53, the market has retrieved from our 61.8fibb level with a strong bullish momentum. NZDJPY is trading above its daily pivot, near its daily resistance acting as a temporary hurdle, but we are expecting for this level to be broken and a projection towards 77.60 and 78.0. Our upper trend line is the major resistance zone which needs to be broken before we start developing any further expectations. Technicals and wave strategies are suggesting more chances of New Zealand dollar taking advantage from the recovery of fundamentals and move its way higher. The head and shoulder pattern on daily chart should also not be ignored in terms of the near by weekly and monthly resistances for they surely will provide temporary reversals. 

NZDJPY D1

Jul 22 2021

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