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NZDUSD – Last week we noted a substantial shift in New Zealand Dollar positioning which warned of an exhaustion low, but a more recent change warns that NZD gains may slow.
Trade Implications NZDUSD – Our retail sample shows that the majority of traders have remained long the NZDUSD since it traded below $0.8600 through July—providing consistent contrarian signal to sell into weakness. Despite the recent Kiwi$ rally, we’ve actually seen positions turn further long since last week; there are now 1.9 trades long for every short. There’s risk of further USD weakness, but the NZD seems an unattractive candidate to play a US Dollar reversal.
See next currency section: GBPJPY – British Pound at Risk of Break Lower versus Yen
— Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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