NZDJPY – SELL STOP – 20th January 2021

NZDJPY – SELL STOP – 20th January 2021 (Closed)

Good evening team,

A pretty choppy market overall with some conflicting movements.

Fundamentally, stimulus talks and positive corporate earnings provide a bullish outlook. However we are seeing some DXY and JPY strength coming into the later session.

Expectations of another large stimulus bill in the US put some downside pressure on the USD this morning. Janet Yellen, US Treasury Sec, urged lawmakers to act big on a corona-virus relief bill, adding the benefits outweigh the expense of a higher debt burden. The USD eased from its four week high with equities and commodity related currencies falling higher this morning.

To add fuel to the risk on scenario, strong earnings have been reported from leading American companies. Goldman Sachs, Bank of America and Netflix all produced strong results. Corporate profit forecasts have been slashed across the board, so do not be surprised if we see further beats on estimates over the coming weeks.

Despite the risk on fundamentals, we see a possible opportunity on the NZDJPY which we have been tracking nicely over the past two weeks.

NZDJPY – 1 Hour Charts

We can see a nice megaphone structure which can occur at the top of a major trend reversal. These structures are generally broken to the downside. The market has already had a bounce from the key structure support, we are no positioning ready for a breakdown.

NZDJPY – 1 Hour Charts

Trade Setup: SELL STOP – Entry price 73.90, stop loss 74.45 and take profit target 72.85. 

Stop loss: 55 pips

Take profit: 105 pips

Trade Setup
SELL STOP

Entry
73.90

Take Profit
72.85

Stop Loss
74.45