Yen Volatility to be Key for Forex Traders as the Trading Day Takes Hold
NZDJPY Potential Retracement | Support at 90.00
NZDJPY has been steadily climbing but it appears that resistance at the current trading levels is holding. This could force the pair to pull back to an area of interest to gather more buying momentum before heading any higher.
Using the Fibonacci retracement tool on the latest swing low and high on the 1-hour time frame shows that the 61.8% level lines up with the 90.00 major psychological handle, which has acted as resistance in the past. If NZDJPY finds support at this area, price could head back to the previous highs around 92.00 and possibly make new ones.
Stochastic is moving down for now, indicating that selling momentum is taking hold and might be enough for some traders to book profits at the current levels. The 100 EMA on the 1-hour chart lines up with the 90.50 minor psychological support, which might also keep losses in check.
The path of least resistance is to the upside since risk appetite has been present in the financial markets and may keep higher-yielding currencies like the Kiwi supported against the lower-yielding Japanese yen. Further gains past 92.00 could mean a move up to the longer-term resistance at the 94.00 major psychological level or higher.
CADJPY Ascending Triangle | Resistance at 96.00
CADJPY has been forming higher lows on the 1-hour time frame but has found resistance at the 96.00 major psychological mark, creating an ascending triangle chart pattern. An upside break past the resistance could mean roughly 150 pips in gains, which is around the same height as the formation.
Similarly, a downside break could yield 150 pips in losses, possibly bringing the pair down to the 94.50 minor psychological support. Take note that the 96.00 handle lines up with a broken support area and that it might hold as resistance, especially since it also lines up with the 50% Fib on the latest swing high and low on the 1-hour chart.
The path of least resistance seems to be to the upside though, as risk appetite continues to keep higher-yielding currencies supported against the safe-haven Japanese yen. Data from Canada hasn’t turned out so well, although data from Japan has also been disappointing.
Event risks for this setup are concentrated on Friday, as Japan is set to print its spending and inflation reports. Keep in mind that, even as retail sales and CPI have been disappointing, the BOJ has indicated that they are not looking to ease further and that they might rely on the wage hikes to spur economic improvements.
Tesla Shares Testing Moving Average | Support at $190/Share
Tesla stock prices seem to be attempting another move higher, as price bounced off the descending triangle support and is currently testing the resistance at the 50 simple moving average on its daily time frame. If this holds as a ceiling, price could make another test or perhaps a break of the $190/share support.
In that case, Tesla shares could be in for more losses, as a break below the consolidation pattern might set off a longer-term drop. The shorter-term 50 SMA is moving below the longer-term 200 SMA, indicating that a downtrend is underway.
MACD is hinting at a potential climb though, as the indicator is moving higher and reflecting a pickup in buying pressure. This could lead to an upside break past the 50 SMA and a rally until the 200 SMA dynamic resistance zone. The nearby resistance at the $225/share level might also be tested then.
RSI is on middle ground, barely offering clues at the moment, but is also on its way up. This is also reflective of a buildup in buying momentum, which might be enough to spark an upside break past the descending triangle resistance.