NZ Dollar at Risk as Positioning Hits Major Extreme
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NZDUSD – Forex trading crowds have never been more short the New Zealand Dollar, and the potential for a major sentiment extreme and important top warns against chasing the high-flying currency higher.
Trade Implications – NZDUSD: Our Senior Technical Strategist writes that the $0.8450 mark is “insanely important” for New Zealand’s currency, and today’s break above suggests that the pair may yet continue higher. Yet it’s likewise critical to note that traders have never been more short. Sentiment and major price reversals are only clear in hindsight, but failure at these levels would tell us that a major top is in place.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.