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NZD-USD

Possible trend shift in NZDUSD – going short | 27th SeptSignal ID: 77680 Time Issued: Monday, 27 September 2021 05:00:16 GMT Status: open Entry: 0.70046 - 0.70342 Limit: N/A Stop Loss: 0.70784 The Tidal Shift Strategy has just sold NZDUSD at 0.70194. The system recommends entering this trade at any price between 0.70046 and 0.70342. The signal was issued because our Speculative Sentiment Index has hit its most extreme positive level for the past 145 trading hours at -1.35149, which suggests that the NZDUSD could be trending downwards.The 14-period Average True Range on a daily chart is 0.00118, so the stop loss has been set at 0.70784. This stop loss order is a trailing stop that will move down as the market moves down. There is no profit target for this strategy. We expect to be closed by the stop loss.Tidal Shift is a trend trading strategy that aims to catch shifts in trend using trader sentiment as an indicator. The strategy looks to buy when the Speculative Sentiment Index reaches its lowest value for the past 145 trading hours, and looks to short when it reaches its highest value for the past 145 trading hours. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website
Short
by FXCM
2
NZDUSD on a confluence area 🦐NZDUSD on the 4h chart is testing the 0.5 Fibonacci level at a confluence zone. The market after the recent high started a retracement move and currently is testing a daily support. According to Plancton's strategy if the price will break above the 4h structure and will satisfy the Academy rules we will set a nice long order. –––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> >4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Long
by InkyGrip
10
NZD/USD:FUNDAMENTAL ANALYSIS+PRICE ACTION+NEXT TARGET ⚡️New Zealand Westpac Consumer Confidence for the third quarter was reported at 102.7. Forex traders can compare this to New Zealand Westpac Consumer Confidence for the second quarter, reported at 107.1. New Zealand Credit Card Spending for August decreased 6.3% annualized. Forex traders can compare this to New Zealand Credit Card Spending for July, which increased 6.9% annualized. US Housing Starts for August are predicted at 1,555K starts, and Building Permits at 1,600K permits. Forex traders can compare this to US Housing Starts for July, reported at 1,534K starts and to Building Permits, reported at 1,630K permits. The US Current Account Balance for the second quarter is predicted at -$191.0B. Forex traders can compare this to the US Current Account Balance for the first quarter, reported at -$195.7B. Welcome back Traders, Investors, and Community! Check the Links on BIO and If you LIKE this analysis, Please support our Idea by hitting the LIKE 👍 button Traders, if you like this idea or have your own opinion about it, please write your own in the comment box . We will be glad for this. Feel free to request any pair/instrument analysis or ask any questions in the comment section below. Have a Good Day Trading !
Short
by FOREXN1
5
NZDUSD testing the 0.382 🦐NZDUSD on the daily chart is testing the 0.382 Fibonacci level at a confluence zone. The market after the recent lower at the 0.68 area started the daily resistance. According to Plancton's strategy if the price will provide a sign of inversion and will satisfy the Academy rules we will set a nice long order. –––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> >4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Long
by InkyGrip
6
NZD USD - FUNDAMENTAL DRIVERSNZD FUNDAMENTAL BIAS: BULLISH 1. Developments surrounding the global risk outlook. As a high-beta currency, NZD has benefited from the market's improving risk outlook over recent months as participants moved out of safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the NZD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the NZD in the med-term , but the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 2. The Monetary Policy outlook for the RBNZ New Zealand’s Zero Covid strategy caused quite the rigmarole for the NZD this week as market participants were forced to unwind some of their very aggressive expectations for rate hikes going into the meeting. The unwind was so aggressive that OIS prices dropped from a 100% chance of a hike to just above 50% at some stage. The RBNZ chose to leave rates unchanged, but despite the virus escalation they offered a much more optimistic tone compared to their prior meeting by updating their rate path projections to show 7 projected hikes between Dec 2021 and H1 2023 (bringing the OCR to 2.0%). This was even more aggressive than the already aggressive bets heading into the meeting before the covid news hit the wires. The Governor also later explained that they need to continue to move on policy and cannot wait for uncertainty as they have a lot of work to do to get back to the neutral rate of 2.0%. Also, when asked about Oct Governor Orr said the meeting is live, but also acknowledged that they’ve made it very clear their next move is likely a hike so they can afford to wait. Thus, with the upgraded rate path the med-term bullish outlook remains intact for the NZD. Last week we saw very hawkish comments from RBNZ’s Hawkesby who stated that the bank’s decision not to hike rates last week was mostly to do with optics and not due to perceived risks, and also explained that the bank contemplated hiking rates by 50 basis points, confirming the bank’s hawkish tone and placing the RBNZ once again miles ahead of any other major central banks in terms of policy normalization and tightening. 3. The country’s economic and health developments The main focus right now will be on how quickly the New Zealand government can get the virus situation under control. We’ve already heard some good news that the government has been able to trace the source of the recent outbreak and should be able to get the situation under control. This will be a key factor to watch in the next few sessions. After solid Q2 GDP data we saw yields push higher at the front-end, which could see markets price in a possible hike in rates as early as the October meeting, so keeping track of the short end this week. 4. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of +2343 with a net non-commercial position of +6206. With the overall optimistic rate path from the RBNZ, the bias for the currency remains unchanged, and with a small net-long positioning the current spot levels for the NZD still looks attractive for med-term buyers, but short-term moves do still look a bit overdone at current levels. USD FUNDAMENTAL BIAS: NEUTRAL 1. The global risk outlook. Global economic data continues to surprise lower and should continue to struggle to surprise to the upside after the pandemic rebound. As the USD usually moves inversely to global growth that should be supportive for the USD. 2. The Monetary Policy outlook for the FED In July the FOMC noted that the economy has made progress toward their goals, and they’ll continue to assess progress in coming meetings. They also took a more sanguine view of the virus situation by removing prior comments that sectors affected by the pandemic ‘remain weak but have shown improvement’ and instead replaced it with ‘sectors most affected by the pandemic have shown improvement but have not fully recovered’. This was initially seen as less dovish, but Powell used his usual dovish tone to correct any ‘hawkish’ takes by stressing that employment still has a ‘ways to go’ and noted that there was still "some ground to cover" when it comes to the labour market. He also reiterated that any decision to announce tapering will be done well in advance. For now, markets are looking at the incoming data to decide whether tapering will be announced at the Jackson Hole Symposium or in the fall. This past week we some interesting comments from Fed’s Waller who tilted their language and stance towards Bullard and Kaplan in expecting that two more solid employment prints (800K-1M) would mean substantial further progress has been met and tapering could then start at a faster pace. This was bullish for the USD, but the more important and market moving comments came from Fed’s Clarida who has seemingly moved into the Neutral camp (previously dovish) by saying he agrees with the median Fed projections of a first hike by early 2023 and more importantly his comments about inflation has moved away from the sanguine view expressed by the doves and is more concerned about current price pressures. This shift saw Dollar upside with all eyes on the Sep NFP to see whether markets will expect Sep or Dec to be the official tapering announcement meeting. 3. Real Yields Despite recent divergence between the USD and US real yields, we still think further downside in real yields will be a struggle so close to new cycle lows and that the probability is skewed higher given the outlook for growth, inflation and tapering and should be supportive for the USD. 4. Economic Data CPI data failed which saw both the Core measures decelerate much faster than market had anticipated wasn’t enough to see any meaningful reaction in assets across the board. Instead, overall choppy risk sentiment was the biggest driver, with some very unexpected upside in the greenback into the close on Friday. All eyes will be on the incoming FOMC meeting, where the biggest focus point will be on the Summary of Economic Projections and whether the updated Dot Plot shows a shift in the median projections for a first lift off in rates. 4. CFTC Analysis Latest CFTC data (updated until 14 Sep) showed a positioning change of +2808 with a net non-commercial position of +24273. For now, with the fundamental outlook still neutral, and with positioning at current levels the incoming data will remain the key driver for the USD’s shortterm volatility . One point of caution about this week’s FOMC meeting is that the net-long positioning right now is far different compared to the very oversubscribed short positioning that was built up in the Dollar in June, which means that a change in the median Dot Plot to 2022 might not have the same impact on the Dollar as it had back in June.
by thunderpips
1
NZDUSD SHORT Opportunity!We are in a descending channel for this pair and are reaching the end of a smaller time frame daily corrective pattern, touching on a strong daily resistance level. Given that we expect to see USD strength over the next 1-2 weeks, and that the NZD is expected to weaken - it is reasonable to look for NZDUSD shorts. There are two possible options here: 1.) Breakout below the corrective channel. If this happens, enter short and keep SL just above the previous highest mark on correction (marked in chart) 2.) Retest of the larger structure, which will effectively result in a "Double top" on the smaller time frame - this is typically a reversal pattern. In this scenario, the SL can be extremely tight, making for potentially huge gains! Like my ideas? Please click the like button and subscribe, for analysis every weekday. Have fun, trade safe! DrBear
Short
by DrBear
1
Possible trend shift in NZDUSD – going shortSignal ID: 77605 Time Issued: Thursday, 16 September 2021 19:00:15 GMT Status: open Entry: 0.70605 - 0.70865 Limit: N/A Stop Loss: 0.71254 The Tidal Shift Strategy has just sold NZDUSD at 0.70735. The system recommends entering this trade at any price between 0.70605 and 0.70865. The signal was issued because our Speculative Sentiment Index has hit its most extreme positive level for the past 145 trading hours at -1.95283, which suggests that the NZDUSD could be trending downwards.The 14-period Average True Range on a daily chart is 0.00104, so the stop loss has been set at 0.71254. This stop loss order is a trailing stop that will move down as the market moves down. There is no profit target for this strategy. We expect to be closed by the stop loss.Tidal Shift is a trend trading strategy that aims to catch shifts in trend using trader sentiment as an indicator. The strategy looks to buy when the Speculative Sentiment Index reaches its lowest value for the past 145 trading hours, and looks to short when it reaches its highest value for the past 145 trading hours. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by FXCM
1
NZD USD - FUNDAMENTAL DRIVERSNZD FUNDAMENTAL BIAS: BULLISH 1. Developments surrounding the global risk outlook. As a high-beta currency, NZD has benefited from the market's improving risk outlook over recent months as participants moved out of safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the NZD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the NZD in the med-term, but the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 2. The Monetary Policy outlook for the RBNZ New Zealand’s Zero Covid strategy caused quite the rigmarole for the NZD this week as market participants were forced to unwind some of their very aggressive expectations for rate hikes going into the meeting. The unwind was so aggressive that OIS prices dropped from a 100% chance of a hike to just above 50% at some stage. The RBNZ chose to leave rates unchanged, but despite the virus escalation they offered a much more optimistic tone compared to their prior meeting by updating their rate path projections to show 7 projected hikes between Dec 2021 and H1 2023 (bringing the OCR to 2.0%). This was even more aggressive than the already aggressive bets heading into the meeting before the covid news hit the wires. The Governor also later explained that they need to continue to move on policy and cannot wait for uncertainty as they have a lot of work to do to get back to the neutral rate of 2.0%. Also, when asked about Oct Governor Orr said the meeting is live, but also acknowledged that they’ve made it very clear their next move is likely a hike so they can afford to wait. Thus, with the upgraded rate path the med-term bullish outlook remains intact for the NZD. Last week we saw very hawkish comments from RBNZ’s Hawkesby who stated that the bank’s decision not to hike rates last week was mostly to do with optics and not due to perceived risks, and also explained that the bank contemplated hiking rates by 50 basis points, confirming the bank’s hawkish tone and placing the RBNZ once again miles ahead of any other major central banks in terms of policy normalization and tightening. 3. The country’s economic and health developments The main focus right now will be on how quickly the New Zealand government can get the virus situation under control. We’ve already heard some good news that the government has been able to trace the source of the recent outbreak and should be able to get the situation under control. This will be a key factor to watch for the NZD in the next few sessions. This week also sees quarterly data in the mix and after recent hawkish RBNZ comments might be enough to spark expectations for a hike in October if growth surprises meaningfully higher. 4. CFTC Analysis Latest CFTC data for the NZD (updated until 7 Sep) showed a positioning change of +6004 with a net non-commercial position of +3863. With the overall optimistic rate path from the RBNZ, the bias for the currency remains unchanged, and with a small net-long positioning the current spot levels for the NZD still looks attractive for med-term buyers, but short-term moves do still look a bit overdone at current levels. USD FUNDAMENTAL BIAS: NEUTRAL 1. The global risk outlook. Global economic data continues to surprise lower and should continue to struggle to surprise to the upside after the pandemic rebound. As the USD usually moves inversely to global growth that should be supportive for the USD. 2. The Monetary Policy outlook for the FED In July the FOMC noted that the economy has made progress toward their goals, and they’ll continue to assess progress in coming meetings. They also took a more sanguine view of the virus situation by removing prior comments that sectors affected by the pandemic ‘remain weak but have shown improvement’ and instead replaced it with ‘sectors most affected by the pandemic have shown improvement but have not fully recovered’. This was initially seen as less dovish, but Powell used his usual dovish tone to correct any ‘hawkish’ takes by stressing that employment still has a ‘ways to go’ and noted that there was still "some ground to cover" when it comes to the labour market. He also reiterated that any decision to announce tapering will be done well in advance. For now, markets are looking at the incoming data to decide whether tapering will be announced at the Jackson Hole Symposium or in the fall. This past week we some interesting comments from Fed’s Waller who tilted their language and stance towards Bullard and Kaplan in expecting that two more solid employment prints (800K-1M) would mean substantial further progress has been met and tapering could then start at a faster pace. This was bullish for the USD, but the more important and market moving comments came from Fed’s Clarida who has seemingly moved into the Neutral camp (previously dovish) by saying he agrees with the median Fed projections of a first hike by early 2023 and more importantly his comments about inflation has moved away from the sanguine view expressed by the doves and is more concerned about current price pressures. This shift saw Dollar upside with all eyes on the Sep NFP to see whether markets will expect Sep or Dec to be the official tapering announcement meeting. 3. Real Yields Despite recent divergence between the USD and US real yields, we still think further downside in real yields will be a struggle so close to new cycle lows and that the probability is skewed higher given the outlook for growth, inflation and tapering and should be supportive for the USD. 4. Economic Data This week was all about NFP…where the miss showed just how difficult it’s been for economists to forecast where post-pandemic labour prints will land. Even though the headline NFP saw a monster miss (235K vs consensus of 750K), the data under the hood wasn’t all that bad with average earnings printing at 0.6% (above max forecasts), and the Unemployment rate still falling to 5.2% from 5.4% and participation staying flat at 61.7%. Thus, with the overall outcome being more of a mixed bag, the only thing the print has done is give the Fed time to kick the can down the road for another month. Catch our Top Trading Opportunities report for colour on this week’s upcoming US CPI print on Tuesday. 5. CFTC Analysis Latest CFTC data for the USD (updated until 7 Sep) showed a positioning change of 775 with a net non-commercial position of +21465. For now, with the fundamental outlook still neutral, and with positioning at current levels the incoming data will remain the key driver for the USD’s short-term volatility , with Fed Speak and the upcoming CPI on Sep 14th and FOMC on the 22nd the main events to keep on the radar.
by thunderpips
Possible trend shift in NZDUSD – going shortSignal ID: 77512 Time Issued: Thursday, 09 September 2021 09:00:16 GMT Status: open Entry: 0.70971 - 0.71237 Limit: N/A Stop Loss: 0.71637 The Tidal Shift Strategy has just sold NZDUSD at 0.71104. The system recommends entering this trade at any price between 0.70971 and 0.71237. The signal was issued because our Speculative Sentiment Index has hit its most extreme positive level for the past 145 trading hours at -2.06718, which suggests that the NZDUSD could be trending downwards.The 14-period Average True Range on a daily chart is 0.00106, so the stop loss has been set at 0.71636. This stop loss order is a trailing stop that will move down as the market moves down. There is no profit target for this strategy. We expect to be closed by the stop loss.Tidal Shift is a trend trading strategy that aims to catch shifts in trend using trader sentiment as an indicator. The strategy looks to buy when the Speculative Sentiment Index reaches its lowest value for the past 145 trading hours, and looks to short when it reaches its highest value for the past 145 trading hours. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Short
by FXCM
16
NZDUSD might be on a rebound 9 SeptemberPrice have recently dipped towards our pivot and might be on a bullish rebound. We can expect price to push up from pivot level (in line with 23.6% and 61% Fibonacci retracement ) towards our graphical take profit level in line with 23.6% Fibonacci retracement level. Our bearish bias is further supported by the price holding below the 0.71035 EMA . Stochastics are indicating oversold levels. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary, and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interest arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by FXCM
2
NZD/USD On a Critical Zone - What's next?Good Morning traders! Today, we will carry out an analysis on the NZD/USD, since it is in a critical zone and can generate an interesting movement in the short term. 🔸Technically speaking, we see the price in a consolidation structure that has been in place for a few months. 🔸During the last few weeks, we saw a very aggressive bullish movement, which reached the upper trend line of this structure. 🔸This is a level where we will most likely see a reaction. 🔸We must be prepared for both situations, both bullish and bearish. - The bullish scenario implies a breakout of the downtrend line. If this happens, we will look for a correction and the next bullish move. - The bearish scenario implies that the price cannot break the trend line and bounces lower. If this happens, we will likely see a retest of the support zone.
by ThinkingAntsOk
2
NZDUSD has potential for short term further upside | 3 SeptPrice is approaching pivot level at 0.71430 which is in line with 127.2% Fibonacci retracement level. Price may potentially bounces further to resistance at 0.72061 which is in-line with 161.8% Fibonacci retracement level. Alternatively, price may drop to support at 0.70572 which is in line with 0% Fibonacci retracement . MACD is also showing potential recent reversal of trend and potential for further upside. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed on the website.
Long
by FXCM
2
Wait for the price to retrace and confirm the uptrend NZDUSDDaily timeframe. The price broke the medium-term downtrend structure. The bearish structure appeared divergence and the price broke Key level 0.71000. Waiting for a retracement to the 61.8 Fibonacci zone of the up move could be done to look for buy setups on smaller timeframes. The profit target is the price zone of ​​0.73000 when the price has signaled to confirm the uptrend. ----------------------------------------------------------------------------------------------- Wish you all have a good trading day!
Long
by tradafx
2
NZD USD - FUNDAMENTAL DRIVERSNZD FUNDAMENTAL BIAS: BULLISH 1. Developments surrounding the global risk outlook. As a high-beta currency, NZD has benefited from the market's improving risk outlook over recent months as participants moved out of safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the NZD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the NZD in the med-term , but the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 2. The Monetary Policy outlook for the RBNZ New Zealand’s Zero Covid strategy caused quite the rigmarole for the NZD this week as market participants were forced to unwind some of their very aggressive expectations for rate hikes going into the meeting. The unwind was so aggressive that OIS prices dropped from a 100% chance of a hike to just above 50% at some stage. The RBNZ chose to leave rates unchanged, but despite the virus escalation they offered a much more optimistic tone compared to their prior meeting by updating their rate path projections to show 7 projected hikes between Dec 2021 and H1 2023 (bringing the OCR to 2.0%). This was even more aggressive than the already aggressive bets heading into the meeting before the covid news hit the wires. The Governor also later explained that they need to continue to move on policy and cannot wait for uncertainty as they have a lot of work to do to get back to the neutral rate of 2.0%. Also, when asked about Oct Governor Orr said the meeting is live, but also acknowledged that they’ve made it very clear their next move is likely a hike so they can afford to wait. Thus, with the upgraded rate path the med-term bullish outlook remains intact for the NZD. Last week we saw very hawkish comments from RBNZ’s Hawkesby who stated that the bank’s decision not to hike rates last week was mostly to do with optics and not due to perceived risks, and also explained that the bank contemplated hiking rates by 50 basis points, confirming the bank’s hawkish tone and placing the RBNZ once again miles ahead of any other major central banks in terms of policy normalization and tightening. 3. The country’s economic and health developments The main focus right now will be on how quickly the New Zealand government can get the virus situation under control. We’ve already heard some good news on Thursday reporting that the government has been able to trace the source of the Delta case and should be able to get the situation under control. This will be a key factor to watch for the NZD in the next few sessions. 4. CFTC Analysis Latest CFTC data for the NZD (updated until 17 August) showed a positioning change of -127 with a net non-commercial position of -362. Positioning data was very interesting for the NZD, as it didn’t show any meaningful drop in the NZD after the flush lower as markets repriced their aggressive rate hike bets going into the RBNZ meeting. With the overall optimistic rate path, the bias for the currency remains unchanged, and with positioning at neutral the current spot levels for the NZD still looks attractive. USD FUNDAMENTAL BIAS: NEUTRAL 1. The global risk outlook. Global economic data continues to surprise lower and should continue to struggle to surprise to the upside after the pandemic rebound. As the USD usually moves inversely to global growth that should be supportive for the USD. 2. The Monetary Policy outlook for the FED In July the FOMC noted that the economy has made progress toward their goals, and they’ll continue to assess progress in coming meetings. They also took a more sanguine view of the virus situation by removing prior comments that sectors affected by the pandemic ‘remain weak but have shown improvement’ and instead replaced it with ‘sectors most affected by the pandemic have shown improvement but have not fully recovered’. This was initially seen as less dovish, but Powell used his usual dovish tone to correct any ‘hawkish’ takes by stressing that employment still has a ‘ways to go’ and noted that there was still "some ground to cover" when it comes to the labour market. He also reiterated that any decision to announce tapering will be done well in advance. For now, markets are looking at the incoming data to decide whether tapering will be announced at the Jackson Hole Symposium or in the fall. This past week we some interesting comments from Fed’s Waller who tilted their language and stance towards Bullard and Kaplan in expecting that two more solid employment prints (800K-1M) would mean substantial further progress has been met and tapering could then start at a faster pace. This was bullish for the USD, but the more important and market moving comments came from Fed’s Clarida who has seemingly moved into the Neutral camp (previously dovish) by saying he agrees with the median Fed projections of a first hike by early 2023 and more importantly his comments about inflation has moved away from the sanguine view expressed by the doves and is more concerned about current price pressures. This shift saw Dollar upside with all eyes on the Sep NFP to see whether markets will expect Sep or Dec to be the official tapering announcement meeting. 3. Real Yields Despite recent divergence between the USD and US real yields, we still think further downside in real yields will be a struggle so close to new cycle lows and that probability is skewed higher from here given the outlook for growth, inflation and tapering and should support the USD. 4. Economic Data This week was all about Jackson Hole…and with the hawks and neutral members turning more hawkish, it all comes down to this week’s NFP report where another sizable beat should be enough to satisfy the substantial progress (at least for a big chunk of the FOMC members ). This NFP has the potential to change market expectations about not only the start but also the pace of tapering, so arguably one of the most important data points we’ve had in quite some time. 5. CFTC Analysis Latest CFTC data for the USD (updated until 17 August) showed a positioning change of -1151 with a net non-commercial position of +20362. For now, with the fundamental outlook still neutral, and with positioning at current levels the incoming data will remain the key driver for the USD’s short-term volatility , with the NFP this week the main event to keep on the radar.
by thunderpips
2
NZD USD - FUNDAMENTAL DRIVERSNZD FUNDAMENTAL BIAS: BULLISH 1. Developments surrounding the global risk outlook. As a high-beta currency, NZD has benefited from the market's improving risk outlook over recent months as participants moved out of safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the NZD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the NZD in the med-term , but the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 2. The Monetary Policy outlook for the RBNZ New Zealand’s Zero Covid strategy caused quite the rigmarole for the NZD this week as market participants were forced to unwind some of their very aggressive expectations for rate hikes going into the meeting. The unwind was so aggressive that OIS prices dropped from a 100% chance of a hike to just above 50% at some stage. The RBNZ chose to leave rates unchanged, but despite the virus escalation they offered a much more optimistic tone compared to their prior meeting by updating their rate path projections to show 7 projected hikes between Dec 2021 and H1 2023 (bringing the OCR to 2.0%). This was even more aggressive than the already aggressive bets heading into the meeting before the covid news hit the wires. The Governor also later explained that they need to continue to move on policy and cannot wait for uncertainty as they have a lot of work to do to get back to the neutral rate of 2.0%. Also, when asked about Oct Governor Orr said the meeting is live, but also acknowledged that they’ve made it very clear their next move is likely a hike so they can afford to wait. Thus, with the upgraded rate path the med-term bullish outlook remains intact for the NZD. Last week we saw very hawkish comments from RBNZ’s Hawkesby who stated that the bank’s decision not to hike rates last week was mostly to do with optics and not due to perceived risks, and also explained that the bank contemplated hiking rates by 50 basis points, confirming the bank’s hawkish tone and placing the RBNZ once again miles ahead of any other major central banks in terms of policy normalization and tightening. 3. The country’s economic and health developments The main focus right now will be on how quickly the New Zealand government can get the virus situation under control. We’ve already heard some good news on Thursday reporting that the government has been able to trace the source of the Delta case and should be able to get the situation under control. This will be a key factor to watch for the NZD in the next few sessions. 4. CFTC Analysis Latest CFTC data for the NZD (updated until 17 August) showed a positioning change of -127 with a net non-commercial position of -362. Positioning data was very interesting for the NZD, as it didn’t show any meaningful drop in the NZD after the flush lower as markets repriced their aggressive rate hike bets going into the RBNZ meeting. With the overall optimistic rate path, the bias for the currency remains unchanged, and with positioning at neutral the current spot levels for the NZD still looks attractive. USD FUNDAMENTAL BIAS: NEUTRAL 1. The global risk outlook. Global economic data continues to surprise lower and should continue to struggle to surprise to the upside after the pandemic rebound. As the USD usually moves inversely to global growth that should be supportive for the USD. 2. The Monetary Policy outlook for the FED In July the FOMC noted that the economy has made progress toward their goals, and they’ll continue to assess progress in coming meetings. They also took a more sanguine view of the virus situation by removing prior comments that sectors affected by the pandemic ‘remain weak but have shown improvement’ and instead replaced it with ‘sectors most affected by the pandemic have shown improvement but have not fully recovered’. This was initially seen as less dovish, but Powell used his usual dovish tone to correct any ‘hawkish’ takes by stressing that employment still has a ‘ways to go’ and noted that there was still "some ground to cover" when it comes to the labour market. He also reiterated that any decision to announce tapering will be done well in advance. For now, markets are looking at the incoming data to decide whether tapering will be announced at the Jackson Hole Symposium or in the fall. This past week we some interesting comments from Fed’s Waller who tilted their language and stance towards Bullard and Kaplan in expecting that two more solid employment prints (800K-1M) would mean substantial further progress has been met and tapering could then start at a faster pace. This was bullish for the USD, but the more important and market moving comments came from Fed’s Clarida who has seemingly moved into the Neutral camp (previously dovish) by saying he agrees with the median Fed projections of a first hike by early 2023 and more importantly his comments about inflation has moved away from the sanguine view expressed by the doves and is more concerned about current price pressures. This shift saw Dollar upside with all eyes on the Sep NFP to see whether markets will expect Sep or Dec to be the official tapering announcement meeting. 3. Real Yields Despite recent divergence between the USD and US real yields, we still think further downside in real yields will be a struggle so close to new cycle lows and that probability is skewed higher from here given the outlook for growth, inflation and tapering and should support the USD. 4. Economic Data This week was all about Jackson Hole…and with the hawks and neutral members turning more hawkish, it all comes down to this week’s NFP report where another sizable beat should be enough to satisfy the substantial progress (at least for a big chunk of the FOMC members). This NFP has the potential to change market expectations about not only the start but also the pace of tapering, so arguably one of the most important data points we’ve had in quite some time. 5. CFTC Analysis Latest CFTC data for the USD (updated until 17 August) showed a positioning change of -1151 with a net non-commercial position of +20362. For now, with the fundamental outlook still neutral, and with positioning at current levels the incoming data will remain the key driver for the USD’s short-term volatility, with the NFP this week the main event to keep on the radar.
by thunderpips
4
NZD USD BUY (NEW ZEALAND DOLLAR - US DOLLAR)NZD FUNDAMENTAL BIAS: BULLISH 1. Developments surrounding the global risk outlook. As a high-beta currency, NZD has benefited from the market's improving risk outlook over recent months as participants moved out of safehavens and into riskier, higher-yielding assets. As a pro-cyclical currency, the NZD enjoyed upside alongside other cyclical assets going into what majority of market participants think was an early post-recession recovery phase. As long as expectations for the global economy remains positive the overall positive outlook for risk sentiment should be supportive for the NZD in the med-term , but the recent short-term jitters and risk off flows once again showed us why risk sentiment is also a very important short-term driver for the currency. 2. The Monetary Policy outlook for the RBNZ New Zealand’s Zero Covid strategy caused quite the rigmarole for the NZD this week as market participants were forced to unwind some of their very aggressive expectations for rate hikes going into the meeting. The unwind was so aggressive that OIS prices dropped from a 100% chance of a hike to just above 50% at some stage. The RBNZ chose to leave rates unchanged, but despite the virus escalation they offered a much more optimistic tone compared to their prior meeting by updating their rate path projections to show 7 projected hikes between Dec 2021 and H1 2023 (bringing the OCR to 2.0%). This was even more aggressive than the already aggressive bets heading into the meeting before the covid news hit the wires. The Governor also later explained that they need to continue to move on policy and cannot wait for uncertainty as they have a lot of work to do to get back to the neutral rate of 2.0%. Also, when asked about Oct Governor Orr said the meeting is live, but also acknowledged that they’ve made it very clear their next move is likely a hike so they can afford to wait. Thus, with the upgraded rate path the med-term bullish outlook remains intact for the NZD. 3. The country’s economic and health developments The main focus right now will be on how quickly the New Zealand government can get the virus situation under control. We’ve already heard some good news on Thursday reporting that the government has been able to trace the source of the Delta case and should be able to get the situation under control. This will be a key factor to watch for the NZD in the next few sessions. 4. CFTC Analysis Latest CFTC data for the NZD (updated until 17 August) showed a positioning change of 797 with a net non-commercial position of -235. It’s important to keep in mind the data will not reflect the big flush lower in the NZD we saw after the virus situation caused market participants to dial down their aggressive hike expectations for the RBNZ. With the overall optimistic rate path the bias for the currency remains unchanged, and with positioning at neutral the current spot levels for the NZD still looks attractive. USD FUNDAMENTAL BIAS: NEUTRAL 1. The global risk outlook. Global economic data continues to surprise lower and should continue to struggle to surprise to the upside after the pandemic rebound. As the USD usually moves inversely to global growth that should be supportive for the USD. 2. The Monetary Policy outlook for the FED In July the FOMC noted that the economy has made progress toward their goals, and they’ll continue to assess progress in coming meetings. They also took a more sanguine view of the virus situation by removing prior comments that sectors affected by the pandemic ‘remain weak but have shown improvement’ and instead replaced it with ‘sectors most affected by the pandemic have shown improvement but have not fully recovered’. This was initially seen as less dovish, but Powell used his usual dovish tone to correct any ‘hawkish’ takes by stressing that employment still has a ‘ways to go’ and noted that there was still "some ground to cover" when it comes to the labour market. He also reiterated that any decision to announce tapering will be done well in advance. For now, markets are looking at the incoming data to decide whether tapering will be announced at the Jackson Hole Symposium or in the fall. This past week we some interesting comments from Fed’s Waller who tilted their language and stance towards Bullard and Kaplan in expecting that two more solid employment prints (800K-1M) would mean substantial further progress has been met and tapering could then start at a faster pace. This was bullish for the USD, but the more important and market moving comments came from Fed’s Clarida who has seemingly moved into the Neutral camp (previously dovish) by saying he agrees with the median Fed projections of a first hike by early 2023 and more importantly his comments about inflation has moved away from the sanguine view expressed by the doves and is more concerned about current price pressures. This shift saw Dollar upside with all eyes on the Sep NFP to see whether markets will expect Sep or Dec to be the official tapering announcement meeting. 3. Real Yields Despite recent divergence between the USD and US real yields, we still think further downside in real yields will be a struggle so close to new cycle lows and that probability is skewed higher from here given the outlook for growth, inflation and tapering and should support the USD. 4. Economic Data Retail sales came in below consensus but given the price action it was clear that majority of participants were looking for a much worse number following the colossal drop in the Univ Mich Sentiment report the week before. However, the USD was also supported by the jittery and risk off flows in the markets and was further aided by the Fed’s minutes which confirmed that the median view of the board has shifted towards earlier tapering. In the week ahead all eyes will be on the Jackson Hole Symposium to see whether the market gets an unofficial tapering announcement nod from Fed Chair Powell which if it happens will open up the possibility of an official announcement at the Sep meeting. 5. CFTC Analysis Latest CFTC data for the USD (updated until 17 August) showed a positioning change of -115 with a net non-commercial position of +19211. For now, with the fundamental outlook still neutral, and with positioning at current levels the incoming data will remain the key driver for the USD’s short-term volatility , with the Jackson Hole and GDP this week the main events to keep on the radar.
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