New Zealand Dollar Rally Looks in Danger
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NZDUSD - The ratio of long to short positions in the NZDUSD stands at -1.13 as 47% of traders are long. Yesterday the ratio was -1.71; 37% of open positions were long. Long positions are 16.7% higher than yesterday and 23.0% above levels seen last week. Short positions are 23.3% lower than yesterday and 1.5% below levels seen last week. Open interest is 8.5% lower than yesterday and 12.3% above its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the NZDUSD may continue higher. The trading crowd has grown less net-short from yesterday and last week.
The recent moderation in trader sentiment gives us pause in our calls for continued NZD gains.
See next currency section: GBPJPY - British Pound Forecast to Gain versus Yen
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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