By: Mike Kulej
The NZD-JPY has been relatively quiet recently. It is moving in rather narrow ranges, as compared to past few years and lacks direction. Long-term charts show a tepid market, undecided about the next major move. This could change soon.
Current situation of the Kiwi-Yen pair closely resembles its behavior just before the great move of 2008. Price movements contracted sharply and shaped into a form of a flag, similar to the breakout point from couple of years ago. In addition, the NZD-JPY remains very close to the 100 SMA, another sign of a market, which might stage a bigger move in the near future.
Other technical indicators also show almost a mirror image of the 2008 situation. The MACD is right at the zero line, just like before, while the Momentum indicator languishes at 97-98 level, which, too, is in the middle of the range established this period.
Overall picture does not indicate the direction of the next major price swing, that will have to be deducted through other means. What it does suggest, however, is increased activity, most likely in first few months of 2011. It will be impossible to miss, because the NZD-JPY could easily move 1500-2000 pips.