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The corrected higher Friday having been badly battered following the monetary policy announcement. The New Zealand Dollar managed to hold its own against its US counterpart while scoring impressive gains versus the rest of the G10 FX field, seemingly still . The turned sharply lower in a move that might have marked pre-positioning before the European Commission opines this week on prospects for a post-Brexit transition period smoothing the UK/EU divorce process.
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Retail trader data shows 57.1% of traders are net-long NZD/, with the ratio of traders long to short at 1.33 to 1. In fact, traders have remained net-long since Oct 18 when NZD/USD traded near 0.70693; price has moved 0.8% lower since then. The percentage of traders net-long is now its lowest since Oct 11 when NZD/USD traded near 0.70946. The number of traders net-long is 2.9% lower than yesterday and 20.7% lower from last week, while the number of traders net-short is 5.4% higher than yesterday and 45.2% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current NZD/USD price trend may soon reverse higher despite the fact traders remain net-long.
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by DailyFX Research Team by Paul Robinson, Market Analyst by Michael Boutros, Currency Strategist by David Song, Currency Analyst by James Stanley, Currency Strategist To get the Asia AM Digest every day,
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