NZD/JPY recovered sharply this week after days of heavy losses!

How high can NZD/JPY fly before FX bears show up again?

We’re zooming out to the daily time frame for the major inflection points to watch out for!

NZD/JPY Daily Forex Chart by TradingView

Thanks to improved risk sentiment and a bit of profit-taking, risk currencies like the New Zealand dollar have recouped some of their losses after days of losing pips to safe havens like the Japanese yen.

NZD/JPY, in particular, received extra support from New Zealand printing better-than-expected employment growth and sticky high wages in Q2 2024 even as the unemployment rate ticked higher from 4.4% to 4.6%.

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the New Zealand dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!

NZD/JPY, which hit new 2024 lows below 84.00, registered a long wick and has popped up to the 89.00 psychological levels.

If the risk-friendly and pro-NZD environment continues in the next couple of days, NZD/JPY could draw in enough buying pressure to test the 90.00 psychological handle or the 92.00 area of interest near the daily chart’s Pivot Point, 200 SMA, and broken trend line support.

But if NZD bulls fail to gain momentum, NZD/JPY may find enough selling pressure around the 90.00 resistance. The pair could revisit the S1 (85.56) Pivot Point support or even make new August lows in the next few days.

Watch the next candlesticks closely for clues on NZD/JPY’s direction! However you choose to trade this setup, make sure you’re following your trading plan and using your best <a href=”https://www.babypips.com/learn/forex/what-is-risk-management” target=”_blank” rel=”noopener”>risk management</a> moves so you can trade for another day!