NZDJPY is testing the 1997 high of 88.50. This is a significant level for the extreme upside extension and also the level where downside rejection could lead to a bigger reversal.
Only a confirmed break above 88.50 will lead to an extension higher but the probability for this is not so high as it is reaching the confluence of a strong resistance long-term falling trend line and horizontal resistance.
This will be hard for directional trading and at this time only the swing trades apply.
This could be a medium-term low-risk short trade, and we will not search for long trade entries at this point.
You can take the short trade with the stop loss just above 89.50 as we see a higher probability for this swing reversal lower to continue. By placing this trade your RR ratio is bigger than 2. In this case, if you are stopped you can reverse your trade to a long trade. The first target is 82.50 but may go beyond that to 76 and lower.
