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. See our updated Privacy Policy here.

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
GBP/USD
Bearish
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
  • The USD could still rally a bit from here, but has resistance not far ahead that it will need to overcome if it is to extend to a larger degree. Get your weekly $USD technical forecast from @PaulRobinsonFX here: https://t.co/n0CVWWOJDe https://t.co/0uLjsQ2gwM
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/D8DXSAdpqC https://t.co/nfiFAlyYXv
  • Slippage can be a common occurrence in forex trading but is often misunderstood. Understanding how forex slippage occurs can enable a trader to minimize negative slippage, while potentially maximizing positive slippage. Learn about FX slippage here: https://t.co/Blrl0unrdT https://t.co/mIsVJ4zTbB
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/hymrumanUY
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfs2Iz https://t.co/6dAqxsVfxJ
  • The results of this weekend’s German Federal Election will likely dominate Euro sentiment at the start of the week ahead but after a possible EUR/USD bounce they will have little long-term impact. Get your weekly $EUR forecast from @MartinSEssex here: https://t.co/Xu3ZT7EtrW https://t.co/5VHKn52MaA
  • The Consumer Price Index, better known by the acronym CPI, is an important economic indicator released on a regular basis by major economies to give a timely glimpse into current growth and inflation levels. Learn how to better understand CPI here: https://t.co/nAa0fHq4Np https://t.co/mf9rsmIvaW
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/mYWO0Eta0P
  • Sterling continues to contract into trend extremes and the focus is on a pending breakout in the weeks ahead. Get your weekly $GBP technical forecast from @MBForex here: https://t.co/ZvEMQuFjSs https://t.co/rMmq9cehnY
  • Japanese candlesticks are a popular charting technique used by many traders, and the shooting star candle is no exception. Learn about the shooting star candlestick and how to trade it here: https://t.co/mfwJ0sZLTs https://t.co/tm4k3IVzHr
NZD/USD Rate Defends August Rally Ahead of US NFP Report

NZD/USD Rate Defends August Rally Ahead of US NFP Report

David Song, Strategist

New Zealand Dollar Talking Points

NZD/USD defends the rally following the better-than-expected New Zealand Employment report even as Federal Reserve officials show a greater willingness to switch gears, and recent developments in the Relative Strength Index (RSI) indicate a larger recovery in the exchange rate as the oscillator breaks out of the downward trend from earlier this year.

Advertisement

NZD/USD Rate Defends August Rally Ahead of US NFP Report

NZD/USD trades above the 50-Day SMA (0.7047) for the first time since June after slipping to a fresh yearly low (0.6881) in July, and the update to the US Non-Farm Payrolls (NFP) report is likely to influence the exchange rate as Fed Vice-Chair Richard Clarida fuels speculation for a looming exit strategy.

Image of DailyFX Economic Calendar for US

The NFP report is now expected to show the US adding 870K jobs in July following the 850K expansion the month prior, and signs of stronger labor market may undermine the recent rebound in NZD/USD as it puts pressure on the Federal Open Market Committee (FOMC) to scale back its quantitative easing (QE) program.

At the same time, a dismal development may spark a bearish reaction in the US Dollar as it provides the Fed with scope to retain the current course for monetary policy, but a further recovery in NZD/USD may fuel the recent shift in retail sentiment like the behavior seen earlier this year.

Image of IG Client Sentiment for NZD/USD rate

The IG Client Sentiment report shows 39.16% of traders are currently net-long NZD/USD, with the ratio of traders short to long standing at 1.55 to 1.

The number of traders net-long is 0.69% lower than yesterday and 19.27% lower from last week, while the number of traders net-short is 3.22% higher than yesterday and 24.03% higher from last week. The decline in net-long position could be a function of profit-taking behavior as NZD/USD defends the advance from earlier this week, while the rise in net-short position has fueled the shift in retail sentiment as 51.48% of traders were net-long the pair last week.

With that said, it remains to be seen if the NFP report will undermine the recent rebound in NZD/USD as the update is anticipated to show a further improvement in employment, but a further recovery in the exchange rate may fuel the recent shift in retail sentiment like the behavior seen earlier this year.

NZD/USD Rate Daily Chart

Image of NZD/USD rate daily chart

Source: Trading View

  • Keep in mind, a head-and-shoulders formation materialized in the first quarter of 2021 as NZD/USD pushed below the 50-Day SMA (0.7047) for the first time since November, and the decline from the yearly high (0.7465) may turn out to be a change in the broader trend as the exchange rate trades below the 200-Day SMA (0.7095) for the first time since June 2020.
  • NZD/USD slipped to a fresh yearly low (0.6881) in July as the Relative Strength Index (RSI)tracked the downward trend established in April, but recent developments in oscillator indicate a larger recovery in the exchange rate as it breaks out of the bearish formation.
  • In turn, NZD/USD trades back above the 50-Day SMA (0.7047) for the first time since June, but need a break/close above the Fibonacci overlap around 0.7070 (61.8% expansion) to 0.7110 (38.2% expansion), which lines up with the 200-Day SMA (0.7095) to bring the 0.7260 (78.6% expansion) region on the radar.
  • However, lack of momentum to break/close above the Fibonacci overlap around 0.7070 (61.8% expansion) to 0.7110 (38.2% expansion) may keep NZD/USD within a defined range, with a move below the 0.6940 (50% expansion) to 0.6960 (38.2% retracement) opening up the 0.6870 (50% retracement) region.

--- 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