NZD/USD opens with a bearish gap

NZD/USD has just entered the support zone (0.78-0.77), the one responsible for the bullish correction that took place in July. Accordingly, there is potential for a rally, although it is going to encounter resistance at 0.7884/70 in the face of the 55-day SMA and weekly PP. Additionally, there is the weekly pivot point overhead, at 0.7918, that should secure the bearish bias.

A significant portion (64%) of SWFX traders reckon that the New Zealand Dollar is going to outpace its North American counterpart. The most likely reason for such a strong change in the sentiment (only 55% were long on NZD/USD on Aug 2) is anticipation that the price should close the downside gap first.