The New Zealand Dollar is in very strong downtrend against the USD and many other currencies. We believe being long GBPNZD is a good trade and we have target of 2.4 with a stop-loss below the previous correction’s low. Trends like these usually continue.
According to Dailyforex: The ratio of long to short positions in the NZDUSD stands at 2.87 as 74% of traders are long. Yesterday the ratio was 3.37; 77% of open positions were long. Long positions are 10.8% lower than yesterday and 10.5% below levels seen last week. Short positions are 4.5% higher than yesterday and 15.2% above levels seen last week. Open interest is 7.3% lower than yesterday and 1.8% below its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the NZDUSD may continue lower. The trading crowd has grown less net-long from yesterday and last week. The combination of current sentiment and recent changes gives a further mixed trading bias.
The Reserve Bank of New Zealand is in easing monetary cycle at the same time when the FED and BOE are in tightening cycle. This clearly shows that the RBZ wants to weaken the currency and it makes sense to do so when commodity prices are going down and the country’s main export product.
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