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NZD/USD struggles to regain bullish momentum

© Dukascopy Bank SA
"The pressure remains to the downside. We will all be focused on the Chinese stock market. Given the volatile moves we saw last week, I think we will see a continuation of that today. We start the week on a cautious note and it looks like the kiwi will continue to edge lower." 
- OMF (based on The New Zealand Herald) 


Pair's Outlook 
At the end of the previous week the New Zealand Dollar declined more than was anticipated, as it pierced through the target support cluster. As a result, the NZD/USD broke out of the bullish trend and dropped down to a fresh five-week low of 0.6540. The pair was close to retesting the 0.65 level today, but managed to recover from intraday losses; however, the 100-day SMA around 0.6579 now lies on the Kiwi's path, providing rather strong resistance. Any rebound is likely to be short-lived, as the sell-off is expected to reach the monthly S2 at 0.6444 in the upcoming weeks. 

Traders' Sentiment 
Today 67% of traders hold long positions (previously 72%), whereas the share of buy orders gradually declined from 67 to 22%.
© Dukascopy Bank SA


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