NZD/USD strengthens towards monthly S2

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"It's a predominantly US dollar move and domestic factors have limited importance. People are expecting that the Federal Reserve is going to be trimming back their stimulus package. People are looking for opportunities to sell the kiwi." 
- HiFX (based on TVNZ)


Pair's Outlook

The South Pacific currencies maintain a strong correlation and both appreciate today. The kiwi stepped higher from a 0.81 level and moves towards the weekly PP level at 0.8161. The pair is also sharply oversold, thus a correction might last rather long and attempt to breach the monthly S2 at 0.8205 or even the weekly R1 at 0.8263.

Traders' Sentiment
Bears remain in the lead, but the advantage left is only minor, as there are 56% of short positions. It is very likely that traders will gradually turn to long positions, as the pair is close to a few-month low. Pending orders market has stronger bearish sentiments, since there are 61% of placed orders, which are ready to sell the New Zealand Dollar.
© Dukascopy Bank SA

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