Hello Traders,
Today guys we look at the NZDJPY pair bearing in mind the fundamental change that the BoJ decided to do in the last MPC meeting. To begin with, Kuroda clearly stated that the country is out of the biting deflation and that they were now uprooting monetary policy measures of cutting back on interest rates and instead focusing on Yield Curve control. With this, they basically meant that the BoJ will be buying 10-year JGBs with the aim of keeping yields at zero and capping short term interest rates while abandoning their monetary base target. This to me meant the death of Bond trading in Japan bourses and well, we saw what has been happening. The initial Yen moves faded mid last week with only streams of bad news coming in. Core inflation and household spending plummeted and today, the tankan manufacturing index and non manufacturing indices moved down either coming worse than expectations or just within the forecasts.
Technically, the charts are pointing to a move up with a break below not ruled out either. My upward bias is purely technical with all information based on the behavior of candles and the current levels. At the moment, price action is trending at the 9 month support level in the daily chart with price action bouncing off this level the 7th time now with the Brexit referendum being the only time when prices broke below this 72.60 price level. With the buy signal formed on the daily chart, I shall look to buy only when there is a convincing buy signal in the 4HR chart where prices are swinging in from the overbought region on the stochastics and is in sync with the 1HR chart move. I shall keep this pair on hold till when there is a buy signal in both the 1HR and 15Min charts at the oversold territory of the stochastics. This will probably be at the 72.6-73.0 support levels. At the same time, if price reverses and breaks above that resistance trend line in the 1HR chart then initiate a long position.
My trade plan therefore is as follows:
Buy Limit: 72.6-73.00
SL: 72.00
TP: Trail your profits with a 1:3 risk reward ratio. Aim to hold this long term.
If there is an early reversal and break above resistance trend line, trade as follows:
Buy Limit: 74.20
SL: 73.60
TP: Trail your profits with a 1:3 risk reward ratio. Aim to hold this long term.
Have a pipful trading day.

NZDJPY 1HR Chart-03.10.2016

Source: Dalmas Ngetich

NZDJPY 4HR Chart-03.10.2016

Source: Dalmas Ngetich

NZDJPY 15Min Chart-03.10.2016

Source: Dalmas Ngetich

NZDJPY Daily Chart-03.10.2016

Source: Dalmas Ngetich

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