New Zealand Dollar Reversal is Short-Lived, Declines Likely
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NZDUSD –Retail FX traders remain long the New Zealand Dollar versus its US namesake, and a contrarian view of crowd sentiment leaves near-term risks to the downside. Last week we highlighted a significant shift towards NZD-selling which suggested that a larger reversal higher was possible. Yet such a forecast was predicated on whether our data showed traders continued to sell; they have not, and our near-term trading bias has shifted accordingly.
Until we see a more sustained shift towards selling, we’ll continue to watch for NZD weakness.
See next currency section: XAUUSD - Gold Prices Remain at Risk for Weakness
--- 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.