NZD/USD Technical ANALYSIS: BEARISH
- New Zealand Dollar remains locked in now-familiar near 0.61 figure
- Overall chart positioning still favoring a bearish NZD/USD outlook
- Trade sentiment studies hint selling pressure may be strengthening
The New Zealand Dollar continues to hover below trend line resistance defining the decline against its US counterpart since the beginning of the year. Neutralizing near-term selling pressure probably requires a daily close above a cluster of back-to-back resistance levels culminating in the 0.6192-0.6245 zone.
From there, the door may open for a challenge of another dense resistance cluster starting just below the 0.64 figure and extending up into a downward-sloping barrier establishing the structural NZD/USD decline since July 2017. A daily close above that barrier would suggest a lasting bullish trend reversal.
Immediate support is marked by the lower bound of a rising channel in play since late March (now at 0.5971). Securing a foothold below that exposes the subsequent layer of support at 0.5670. A further push beyond that puts the 2020 low at 0.5470 in the crosshairs.
NZD/USD daily chart created using TradingView
NZD/USD TRADER SENTIMENT
Retail sentiment data shows 56.65%of traders are net-long, with the long-to-short ratio at 1.31 to 1. IG Client Sentiment (IGCS) is typically used as a contrarian indicator, sothis positioning tilt suggests that NZD/USD is aiming lower. Furthermore, the net-long skew has grown compared with yesterday and last week. This seemingly makes for a stronger NZD/USD-bearish bias.
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NZD/USD TRADING RESOURCES:
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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