NZD/JPY Daily Price Forecast – 7th May 2025

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Trade Summary:

NZDJPY
Buy Stop @ 86.187
TP @ 86.469
SL @ 85.643

NZD/JPY Analysis (4-Hour Chart)

Key Observations:

• Trend Analysis:

  • The chart shows a bullish trend in the short term, with higher highs and higher lows forming.

  • The price is trading above the 200-period moving average (red line), indicating a bullish bias in the medium term.

  • The 50-period moving average (yellow line) is also sloping upward, further confirming the bullish momentum.

• Key Levels:

  • Buy Stop: 86.187

    • This level is set slightly above the current price, indicating a breakout strategy. If the price breaks above this level, it could signal further bullish momentum.

  • Take Profit (TP): 86.469

    • This level is the target for the bullish move, representing a potential resistance zone.

  • Stop Loss (SL): 85.643

    • This level is set below the recent swing low, providing a safety net in case the price reverses.

• Candlestick Patterns:

  • Recent candlesticks show bullish momentum with strong green candles, indicating buying pressure.

  • However, there are some wicks on the top of the candles, suggesting minor resistance at higher levels.

• Moving Averages:

  • The 50-period moving average (yellow) is acting as dynamic support, with the price bouncing off it multiple times.

  • The 200-period moving average (red) is far below the current price, indicating strong upward momentum.

• Risk-Reward Ratio:

  • The distance between the Buy Stop and Take Profit levels is approximately 28.2 pips.

  • The distance between the Buy Stop and Stop Loss levels is approximately 54.4 pips.

  • This setup has a risk-reward ratio of approximately 1:0.52, which is relatively low. Traders may consider adjusting the levels to improve the ratio.

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Potential Scenarios:

• Bullish Breakout:

  • If the price breaks above the Buy Stop level (86.187), it could trigger a rally toward the Take Profit level (86.469).

  • A sustained move above 86.469 could open the door for further upside, depending on market conditions.

• Reversal:

  • If the price fails to break above 86.187 and instead falls below the Stop Loss level (85.643), it could signal a bearish reversal.

  • In this case, the price may test lower support levels near 85.000 or the 200-period moving average.

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Conclusion:

The NZD/JPY pair is showing bullish momentum, with a potential breakout above 86.187. However, the risk-reward ratio of the current setup is not ideal, and traders should consider adjusting their levels or waiting for confirmation of the breakout. Monitoring key levels and candlestick patterns will be crucial for making informed trading decisions.

Recommended Lot Size

Trading is all about statistics.

While we can experience winning streaks, we can also suffer from losing streaks.

As such, we should always size each trade to withstand losing streaks (if any).

It's widely recommended that you should not risk more than 2% of your capital for each trade.

We believe it's easier to control your lot size by limiting your lot sizing to 0.01 for every $500 in your account.

So if you have $5000, then risk no more than 0.10 lot size per trade.

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If you spot a mistake especially when it comes to the price, please use common sense and check the chart.

We wish you good luck and good profit for this trade idea.

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