NZD/USD Analysis.

  • Monetary policy conundrum adds uncertainty ahead of September RBNZ meeting.
  • NZD/USD Rejected at the key weekly level around 0.6785.
  • Signs of NZDUSD weakness. macd, RSI and bearish engulfment.
  • IG client sentiment :Recent dovishness has invalidated the typical opposing sentiment view.

NZD/USD faces resistance as RBNZ considers using more unconventional tools.

The Kiwi gave up some of its recent gains against the U.S. dollar as the U.S. dollar began to strengthen against its peers, breaking away from the downward trend that characterized much of the third quarter.

In its August policy assessment, the RBA expanded the Large Scale Asset Purchase (LSAP) program to NZ$100 billion to reduce retail interest rates in order to meet its terms of reference. In addition, the Monetary Policy Committee (MPC) agreed that “it is important to continue to actively prepare an additional package of monetary tools” and said that the deployment of these tools would depend on the outlook for inflation and employment.

The Monetary Policy Committee clarified that these instruments include the possibility of a negative official cash rate (OCR), while providing funds to retail banks to stimulate lending activity.

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NZD/USD reverses to key weekly support area.

NZD/USD has turned sharply lower since approaching the important weekly mark. The area of Resistance. It is at around 0.6785 (highlighted in blue). This level is significant as prices have previously approached this level and have so far failed to break it.

NZD/USD Weekly Chart. Reversal from key resistance area

Kiwi Dollar Forecast: NZD/USD Showing Potential Signs of Exhaustion

The chart compiled Richard Snow. , IG

Signs of NZDUSD weakness. macd, RSI and bearish engulfment.

The daily chart provides more details of the recent move lower. The price approached the confluence area (key weekly level 0.6785 and trendline resistance) and then formed a strong bearish engulfing pattern (black rectangle).

Learn how to identify and apply bearish engulfing pattern Go to the price chart

Continuing to move lower should not be considered This can be seen in the negative divergence against the US dollar. Relative Strength Indicator (RSI). Price made higher highs while the RSI printed lower highs, opening the door for a possible bearish move. Moreover, the bearish MACD cross It may also support the bearish narrative. Near-term support is at 0.6585, then 0.6480, then 0.6373 levels.

However, a strong move away from 0.6585 could indicate a bullish The trend It is not running yet. Resistance is still at the key weekly level of 0.6785 and the next area of resistance is at 0.6940, nearly 200 pips apart.

NZD/USD daily chart. Bearish engulfment, MACD crossover and negative divergence.

NZDUSD Price Chart

Charts and graphs prepared Richard Snow. , IG

 

 

NZD/USD IG client sentiment mixed, but hints at possible move lower.

NZDUSD Client Sentiment

  • NZD/USD Retail trader data shows that 39.15% of traders are net long and the ratio of trader shorts to longs is 1.55 to 1.
  • We usually take viewed from another angle impact on crowd sentiment, while the fact that traders are net short suggests that NZD. / USD price may continue to rise.

 

Featured by Rich Dvorak

Identify ways to analyze customer emotions

 

  • The number of traders net long increased by 26.23% from yesterday and 3.59% from last week, while the number of traders net short decreased by 23.13% from yesterday and 11.58% from last week.
  • The recent change in sentiment warns that the current NZD/USD price trend is Although traders remain net short, it could reverse down soon. .

 

The client is net long.

of clients are net short.

Change. exquisite shorts OI
Daily. 16% -15% -6%
weekly -5% -17% -13%

 

— Written by Richard Snow for DailyFX.com

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2020-09-09