News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Notice

BoE Chief Econimist (Hawk) is to Step Down From BoE After June Meeting

Real Time News
  • When is Kodak going to get into the SPAC game? Bitcoin mining pivot in 2018 and Vaccine production pivot in July 2020. Any day now...
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 2.19% Gold: 0.74% Oil - US Crude: 0.34% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/QNPEEysdEK
  • The Dow Jones, Nasdaq 100 and S&P 500 will look to the arrival of earnings season for influence. Get your #equities market update from @PeterHanksFX here:https://t.co/96vOGDYq2K https://t.co/xUE3PxGz9B
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.41%, while traders in France 40 are at opposite extremes with 75.87%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/akuL5mmcvW
  • Pfizer states it can deliver 10% more vaccine doses to the US by the end of May $PFE $SPX $NDX $RUT
  • Had the pleasure of sitting down with @GuyAdami and @RiskReversal for another episode of The Macro Setup to discuss $GLD $BTC and $SPX ahead of earnings season and the Coinbase IPO Watch here - https://t.co/6usEdkA5om
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: France 40: 0.41% Germany 30: 0.06% Wall Street: 0.00% FTSE 100: 0.00% US 500: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0qT3sH7l3i
  • #Bitcoin breaks out to fresh all-time highs as investors cast an eye to the long awaited Coinbase IPO #BTC $BTCUSD https://t.co/qwxlzkGa9C
  • NY Fed Treasury purchase schedule remains unchanged - BBG
  • Silver posting a strong session, now up 2.3% on the day. In recent trade, silver has struggled to break above the 50-day EMA $XAG $USD https://t.co/BetnXeKLj3
NZD/USD Outlook: Tilt in Retail Sentiment Persists Ahead of FOMC

NZD/USD Outlook: Tilt in Retail Sentiment Persists Ahead of FOMC

David Song, Strategist

New Zealand Dollar Talking Points

NZD/USD struggles to extend the advance from the start of the week as consumer confidence in New Zealand weakens for three consecutive quarters, but the pullback from the yearly high (0.6789) may end up being an exhaustion in the bullish price action rather than a change in trend as the tilt in retail sentiment persists.

NZD/USD Outlook: Tilt in Retail Sentiment Persists Ahead of FOMC

NZD/USD slipped below the 0.67000 handle as the Westpac Consumer Confidence survey narrowed to 95.1 from 97.2 in the second quarter of 2020 to mark the lowest reading since 2008, and the exchange rate may continue to consolidate ahead of the Federal Reserve interest rate decision on September 16 as the central bank prepares to release the updated Summary of Economic Projections (SEP).

It remains to be seen if the new forecasts from Fed officials will reveal anything new as Chairman Jerome Powell and Co. discuss an outcome-based approach versus a calendar-based forward guidance for monetary policy, and more of the same from the June meeting may drag on NZD/USD as the central bank appears to be on track to retain the current stance throughout the remainder of the year.

However, projections for a lower neutral Fed Funds rate may prop up NZD/USD as the Federal Open Market Committee (FOMC) plans to “achieve inflation that averages 2 percent over time,” and current market trends may stay intact ahead of the US election as the central bank vows to “increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace.

At the same time, the crowding behavior in NZD/USD looks poised to persist even though the Reserve Bank of New Zealand (RBNZ) prepares a “package of additional monetary policy tools to support the economy” as retail trades have been net-short the pair since mid-June.

Image of IG Client Sentiment for NZD/USD rate

The IG Client Sentiment report shows 39.35% of traders are net-long NZD/USD, with the ratio of traders short to long at 1.54 to 1. The number of traders net-long is 39.27% higher than yesterday and 46.15% higher from last week, while the number of traders net-short is 9.63% higher than yesterday and 10.48% lower from last week.

The rise in net-long position has helped to alleviate the tilt in retail sentiment as only 28.44% of traders were net-long NZD/USD last week, but the rise in net-short interest suggests the crowding behavior will persist even though the Fed’s balance sheet climbs back above $7 trillion in August.

With that said, the recent weakness in NZD/USD may prove to be an exhaustion in the bullish price action rather than a change in trend as the exchange rate trades to fresh yearly high (0.6789) in September, and current market trends may keep the exchange afloat ahead of the next RBNZ meeting on September 22 as the tilt in retail sentiment persists.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by David Song
Learn More About the IG Client Sentiment Report
Get My Guide

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

NZD/USD Rate Daily Chart

Image of NZD/USD rate daily chart

Source: Trading View

  • Keep in mind, NZD/USD cleared the February high (0.6503) in June as the Relative Strength Index (RSI) broke above 70 for the first time in 2020, with the exchange rate taking out the January high (0.6733) in September following the close above the Fibonacci overlap around 0.6710 (61.8% expansion) to 0.6740 (23.6% expansion).
  • However, lack of momentum to break/close above the 0.6790 (50% expansion) region pushed NZD/USD towards the Fibonacci overlap around 0.6600 (38.2% expansion) to 0.6630 (78.6% expansion), and the exchange rate may continue to consolidate over the coming days as it struggles to climb back above the 0.6710 (61.8% expansion) to 0.6740 (23.6% expansion) area.
  • Nevertheless, the pullback from the yearly high (0.6789) may end up being an exhaustion in the bullish price action rather than a change in trend as current market trends remain in place, with a break/close above the 0.6710 (61.8% expansion) to 0.6740 (23.6% expansion) area bringing the 0.6790 (50% expansion) region back on the radar.
Starts in:
Live now:
Apr 14
( 00:04 GMT )
Join Day 3 of the DailyFX Summit discussing currencies
What Do Other Traders Buy/Sell Bets Say About Price Trends?
Register for webinar
Join now
Webinar has ended

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong

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

DISCLOSURES