In today's analysis, we will focus on NZDJPY, an interesting pair that has shown notable movements recently. Unlike the USD, which has been heavily influenced by recent inflation data and the FED's interest rate decision, NZDJPY offers a unique trading opportunity.
On the H4 chart, the price has formed a triple top or head and shoulders pattern, marked with yellow. However, instead of breaking the neckline marked with green horizontal support, the price reversed and moved significantly higher, canceling the bearish pattern. This failure of the sellers to capitalize on the head and shoulders formation indicates a strong shift in momentum towards the buyers.
This week's rise is particularly significant as the price broke above a key resistance, the orange horizontal resistance, which marked the tops of the head and shoulders pattern. Trading above this resistance provides a robust signal to buy. As long as the price remains above the orange area, the sentiment remains positive. A drop below this area would suggest a false bullish breakout and could signal a bearish turn, but for now, buyers seem to have the upper hand.