Market Sentiment Knowledge Ship Bearish Sign for NZD/USD

Market sentiment evaluation:

  • Market confidence has dropped a little bit however the main themes of stronger US shares and a firmer US Dollar will probably re-emerge.
  • Within the meantime, IG consumer sentiment knowledge are sending out a bearish sign for NZD/USD forward of one other anticipated rate of interest improve in New Zealand tomorrow.

Dealer confidence stays excessive

Dealer confidence remains to be lofty within the markets and that ought to be sure that the key themes of stronger US inventory indexes and a firmer US Greenback reassert themselves after a pause for breath. Because the EUR/USD chart under exhibits, the pair is modestly larger Tuesday however the downward development stays intact, with the USD helped by the re-nomination of Jay Powell as Fed chairman.

EUR/USD Worth Chart, Each day Timeframe (Might 20 – November 23, 2021)

Latest EUR/USD price chart

Chart by IG (You possibly can click on on it for a bigger picture)

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Bearish NZD/USD

Turning to the IG consumer positioning knowledge, the numbers are presently sending out a bearish sign for NZD/USD though the Reserve Financial institution of New Zealand is broadly anticipated to observe up its October curiosity price improve with one other 25-basis-point elevate at its assembly Wednesday.

The retail dealer knowledge present 54.91% of merchants are net-long, with the ratio of merchants lengthy to quick at 1.22 to 1. The variety of merchants net-long is 1.49% decrease than yesterday however 30.95% larger than final week, whereas the variety of merchants net-short is 6.87% decrease than yesterday and 23.88% decrease than final week.

Right here at DailyFX, we sometimes take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests NZD/USD might proceed to fall. Merchants are additional net-long than yesterday and final week, and the mixture of present sentiment and up to date adjustments provides us a stronger NZD/USD-bearish contrarian buying and selling bias.

NZD/USD client positioning

On this webinar, I appeared on the developments within the main forex, commodity and inventory markets, on the forward-looking knowledge on the economic calendar this week, on the IG Client Sentiment page on the DailyFX website, and on the IG Client Sentiment reports that accompany it.

— Written by Martin Essex, Analyst

Be at liberty to contact me on Twitter @MartinSEssex

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