Wednesday, March 25, 2009

NZD-Yen daily resisted at previous high

I wrote a couple of days back that Nzd-yen had broken out of major resistance and that we should
look to buy on dips. Well, the pair has continued to rally since, but faced major resistance yesterday
and today from the previous swing high of 56.2-56.3 levels (yellow line).

Further weakness can be expected from here on as the whole market is showing signs of weakness
and is due for a decent pullback over the coming few days.

So one should look to buy closer to the 50.22-51.68 area  which is the .5 - .618 retracement area,
with the 50% retracement level also coinciding with the rising trendline on Thu-Fri. This would be ideal area to enter.

Till then, one can wait on the sidelines patiently for this pull back to happen, or can even establish shorts against 56.5 as stop.