We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.33%, while traders in US 500 are at opposite extremes with 76.39%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/yX00FwBRaN
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.18% 🇨🇦CAD: 0.14% 🇦🇺AUD: 0.07% 🇳🇿NZD: -0.00% 🇨🇭CHF: -0.01% 🇯🇵JPY: -0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/4auhNzVWYV
  • Heads Up:🇧🇷 BCB Focus Market Readout due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-05-25
  • 🇲🇽 Balance of Trade Actual: $-3.087B Expected: $2.04B Previous: $3.398B https://www.dailyfx.com/economic-calendar#2020-05-25
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.32%, while traders in US 500 are at opposite extremes with 76.77%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Tha105cXZ5
  • Heads Up:🇲🇽 Balance of Trade due at 11:00 GMT (15min) Expected: $2.04B Previous: $3.392B https://www.dailyfx.com/economic-calendar#2020-05-25
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.73% Gold: -0.29% Silver: -0.85% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/enjCuKY7xE
  • $SPX faces pivotal resistance, while #FTSE 100 continues to trade in rangebound fashion. Get your #equities technical analysis from @JMcQueenFX here: https://t.co/JXLZIbXzrQ https://t.co/37cpFa4skw
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.21% 🇬🇧GBP: 0.11% 🇦🇺AUD: -0.03% 🇳🇿NZD: -0.05% 🇨🇭CHF: -0.06% 🇯🇵JPY: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/W8OTNI6e3n
  • 🇮🇱 GDP Growth Rate QoQ 1st Est Actual: -1.8% Previous: 1.1% https://www.dailyfx.com/economic-calendar#2020-05-25
NZD Sits in Oversold Territory And May Remain There Longer

NZD Sits in Oversold Territory And May Remain There Longer

2017-08-12 06:23:00
Nick Cawley, Strategist
Share:
NZD Sits in Oversold Territory And May Remain There Longer

Talking Points:

  • NZD/USD is at a one-month low as the central bank looks to talk the Kiwi lower.
  • Monetary policy is set to remain accommodative for a ‘considerable period.’
  • NZDUSD is technically oversold but any bounce may find further sellers.

Fundamental Forecast for NZD: Neutral

The Reserve Bank of New Zealand (RBNZ) left monetary policy unchanged at governor Graeme Wheeler’s last monetary policy meeting on Thursday. The governor left rates unchanged at 1.75% but said that a lower New Zealand dollar is needed to “increase tradables inflation and help deliver more growth.” This comment, coupled with the closing “monetary policy will remain accommodative for a considerable period” sent the Kiwi lower and back to levels last seen over one month ago. The governor who is set to leave on September 26 also said in comments to a parliamentary committee that currency market intervention to weaken the NZD is “always open to us.”

A look at the chart below shows NZDUSD appreciating from a 0.6820 low on May 11 to a recent high of 0.7560 on July 27 before sentiment changed sharply. A rebound to the head and shoulders neckline at 0.7368 remains a possibility with the pair sitting in oversold stochastic territory at just over 23.

However a central bank that willingly says that currency intervention is a possibility and reiterates that the NZD is too high for its liking, normally gets its way. This leaves the July 11 low of 0.7205 vulnerable as the next downside target ahead of the Fibonacci 50% retracement at 0.7188 and the 61.8% retracement at 0.7110.

Chart NZDUSD Daily Timeframe (February 2017 - August 11, 2017)

NZD Sits in Oversold Territory And May Remain There Longer

Chart by IG

And retail traders will hope the market continues to move lower as IG Client Sentiment data shows 28.6% of traders are net-long with the ratio of traders short to long at 2.5 to 1. In fact, traders have remained net-short since May 24 when NZDUSD traded near 0.68562; price has moved 6.5% higher since then. The number of traders net-long is 23.8% lower than yesterday and 13.3% lower from last week, while the number of traders net-short is 8.4% lower than yesterday and 22.7% lower from last week. While we typically take a contrarian view – suggesting NZDUSD should move higher – the combination of current sentiment and recent changes gives us a mixed trading bias.

If you would like to know about the IG Client Sentiment Indicator and how to use it, please click here for a free guide.

--- Written by Nick Cawley, Analyst.

To contact Nick, email him at nicholas.cawley@ig.com

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.