NZD JPY - Sell set ups on imbalances
Hello Traders and Analysts,
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Master Key for zones
NZD JPY Monthly imbalances
Using the monthly time frame, it is clear to identify the buying imbalance and selling imbalance here.
At this moment in time, there is no opportunity to sell as price has not yet reacted to the zones in place.
The monthly wicks also highlight a great opportunity where the imbalance is strongest within the wick zones around 81.30- 84 JPY established. While this zone is a large trading gap - the best imbalances for price levels to work from here is on the weekly, daily.
Second to this, the monthly test occurring back in March 2020 created an imbalance low, whereby the yen was showing strength from a fundamental perspective of the safe haven. The low of 59.3 NZD to JPY was a structural low point where price indicated two key criteria;
1. Informing to positional buyers that the sellers have taken over the daily and weekly imbalance to create correctional move.
2. The key zone here is price hitting a monthly imbalance block at the structural low using the three month chart*
what is evident here?
The imbalance perfectly aligns here as price touches the price close on the three month as assigned on the far left with the green arrow.
The second fill which occurred January 2020, touched the same zone between 59.30-59.50 NZD JPY.
Price had to reverse from here, this is how the imbalance fill works where price perfectly reacts of a pivot point or a pricing inefficiency.
Three month chart*
Monthly chart
Weekly imbalance plan
From a weekly perspective, there has been a great opportunity to buy in for the positional buyers [within the monthly imbalance] and within the 68.00 - 69.80 zone. There reason for this zones important is due to two reasons;
1. Price aligns with the weekly low referring to June 2016 imbalance sell rejection.
2. When forming a rally, base rally, or in a market shift 'poising' for a bullish continued market structure, the crucial aspect here is to understand the trading range on the daily and weekly timeframe where the maximum to the pip top of the range identifies with the 71.96-72.00. The significance of this here is purely the closing out of the fractal pattern completing the cycle [Refer to Screenshot ii].
Screenshot two - Fractal completion.
This shows the clear pattern that price will be 'broken' to create a new high here.
I. The low has been confirmed by the previous weekly touch of the candle wick high. - this nets off.
II. The body low has been netted by the wick high.
Fibonacci pathway
Using the daily timeframe, the application of the Fibonacci can be used here to plot next moves for entry areas in conjunction with the higher time frame to use the price path to reach the desired targets.
Using the imbalance and Fibonacci tool also assists with trade management in terms of open interest fee's and furthermore exposure in short term trend shifts.
The outcome from the Fibonacci extension tool.
This has been used for demonstration purposes for the analysis, however the technique in place here is how the top down analysis is predicted and executed.
Daily imbalance levels
The levels are clearly identified, using the main criteria from the monthly and weekly imbalances.
The levels on the daily take time to develop. Plot and assess upon price volatility and also the probability of the trade shifting direction [short term], or in some cases, long term - dependant of the imbalance cycle*
Cross pair Analysis
Understanding the cross pairs and correlation between commodity pairs
*The first chart shows the weekly and monthly using the commodity pairs:
AUD JPY & CAD JPY in conjunction with NZD JPY.
The pattern of the correlation is clear - these pairs are heading towards imbalances.
*The second chart provides key data for the weekly and monthly using the major pair currencies*
GBP JPY is considered a minor pair - but with the correlation of XAU and commodity pairs the GBP also is a major pair so in this case with considered, it is analysed for the performance.
Using the cross asset of NZD JPY vs XAU USD, while cross referencing VIX and US 10 year yields.
The basis behind this, is to use the risk based approach of the NZD being a commodity currency where a produce of Gold and the correlation between the strength of the NZD and XAU in a 'risk on' approach. Particularly for the NZD using the imbalances as reference points.
The use of variable instruments of the VIX and 10 year US yields are due to the 'risk off' scenario plan.
Sell Position ideas:
Note;
*I VIX and 10 year - spikes in session Fundamental decisions do not necessarily result in a 'jolt' in the price on every occasion. This opens the door to a strong positional buying opportunity and openness to credit risk take on.
*II. The capitulation waters here on the economic cycle is ever present where buyers and sellers in the short term are profit taking and engineering liquidity from the transfer from the impatient to patient traders.
Volume profile:
Here is an important level using the monthly time frame looking at the volume profile - using 22 input ranges against the volume profile area of 70.
The volume area up - is the blue figure and the yellow is the sell volume.
The Yellow volume, shows at the critical imbalance level. This coincides with the high probability of the imbalance where price will show sells.
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Master Key for zones
- Blue = Monthly
- Purple = weekly
- Red = 4 Days
- Yellow = 16 Hours
- Orange = Daily
- Dark Green = 8 Hour
- Grey = 4hour
- Pink = 1 hour
NZD JPY Monthly imbalances
Using the monthly time frame, it is clear to identify the buying imbalance and selling imbalance here.
At this moment in time, there is no opportunity to sell as price has not yet reacted to the zones in place.
The monthly wicks also highlight a great opportunity where the imbalance is strongest within the wick zones around 81.30- 84 JPY established. While this zone is a large trading gap - the best imbalances for price levels to work from here is on the weekly, daily.
Second to this, the monthly test occurring back in March 2020 created an imbalance low, whereby the yen was showing strength from a fundamental perspective of the safe haven. The low of 59.3 NZD to JPY was a structural low point where price indicated two key criteria;
1. Informing to positional buyers that the sellers have taken over the daily and weekly imbalance to create correctional move.
2. The key zone here is price hitting a monthly imbalance block at the structural low using the three month chart*
what is evident here?
The imbalance perfectly aligns here as price touches the price close on the three month as assigned on the far left with the green arrow.
The second fill which occurred January 2020, touched the same zone between 59.30-59.50 NZD JPY.
Price had to reverse from here, this is how the imbalance fill works where price perfectly reacts of a pivot point or a pricing inefficiency.
Three month chart*
Monthly chart
Weekly imbalance plan
From a weekly perspective, there has been a great opportunity to buy in for the positional buyers [within the monthly imbalance] and within the 68.00 - 69.80 zone. There reason for this zones important is due to two reasons;
1. Price aligns with the weekly low referring to June 2016 imbalance sell rejection.
2. When forming a rally, base rally, or in a market shift 'poising' for a bullish continued market structure, the crucial aspect here is to understand the trading range on the daily and weekly timeframe where the maximum to the pip top of the range identifies with the 71.96-72.00. The significance of this here is purely the closing out of the fractal pattern completing the cycle [Refer to Screenshot ii].
Screenshot two - Fractal completion.
This shows the clear pattern that price will be 'broken' to create a new high here.
I. The low has been confirmed by the previous weekly touch of the candle wick high. - this nets off.
II. The body low has been netted by the wick high.
Fibonacci pathway
Using the daily timeframe, the application of the Fibonacci can be used here to plot next moves for entry areas in conjunction with the higher time frame to use the price path to reach the desired targets.
Using the imbalance and Fibonacci tool also assists with trade management in terms of open interest fee's and furthermore exposure in short term trend shifts.
The outcome from the Fibonacci extension tool.
This has been used for demonstration purposes for the analysis, however the technique in place here is how the top down analysis is predicted and executed.
Daily imbalance levels
The levels are clearly identified, using the main criteria from the monthly and weekly imbalances.
The levels on the daily take time to develop. Plot and assess upon price volatility and also the probability of the trade shifting direction [short term], or in some cases, long term - dependant of the imbalance cycle*
Cross pair Analysis
Understanding the cross pairs and correlation between commodity pairs
*The first chart shows the weekly and monthly using the commodity pairs:
AUD JPY & CAD JPY in conjunction with NZD JPY.
The pattern of the correlation is clear - these pairs are heading towards imbalances.
*The second chart provides key data for the weekly and monthly using the major pair currencies*
GBP JPY is considered a minor pair - but with the correlation of XAU and commodity pairs the GBP also is a major pair so in this case with considered, it is analysed for the performance.
Using the cross asset of NZD JPY vs XAU USD, while cross referencing VIX and US 10 year yields.
The basis behind this, is to use the risk based approach of the NZD being a commodity currency where a produce of Gold and the correlation between the strength of the NZD and XAU in a 'risk on' approach. Particularly for the NZD using the imbalances as reference points.
The use of variable instruments of the VIX and 10 year US yields are due to the 'risk off' scenario plan.
Sell Position ideas:
Note;
*I VIX and 10 year - spikes in session Fundamental decisions do not necessarily result in a 'jolt' in the price on every occasion. This opens the door to a strong positional buying opportunity and openness to credit risk take on.
*II. The capitulation waters here on the economic cycle is ever present where buyers and sellers in the short term are profit taking and engineering liquidity from the transfer from the impatient to patient traders.
Volume profile:
Here is an important level using the monthly time frame looking at the volume profile - using 22 input ranges against the volume profile area of 70.
The volume area up - is the blue figure and the yellow is the sell volume.
The Yellow volume, shows at the critical imbalance level. This coincides with the high probability of the imbalance where price will show sells.
Disclaimer
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