NZD: At the beginning of the week, the New Zealand dollar is under marginal pressure, which is despite the continued rise in the stock space. Although, given Kiwi’s upward trend in the short term (Figure 1), it is natural to expect a few modest gains. This means that as long as risk appetite is positive, the downside of Kiwi is likely to be limited.
Source: DailyFX, Refinitiv
Covid cases in New Zealand are starting to ease as the 7-day average falls from a peak reported on 29 August to 66 to 39th. Prime Minister Arden then announced that from tomorrow, closure measures would be eased for all non-Auckland areas to warn Level 2, a factor that would remove the layer of uncertainty for the NZD and thus likely see the currency.
Looking at the chart, the downward trend line due to the high YTD has now risen further and thus the pair is looking at the 200DMA test at 0.7117. However, as risk appetite continues to strengthen and NZ / US interest rates move in favor of Kiwi, the risks are more in the direction of the 0.7200 breach. Let’s remind you that when the US is out on a weekday, the volume is lighter, so I wouldn’t read too much about today’s pricing.
NZD /USD Diagram: daily schedule
The IG customer’s mood gives a stronger anti-bullish prejudice
The data show that 30.90% of traders are network lengths, the ratio of short to long traders is 2.24: 1. The number of net length traders is 3.29% higher than yesterday and 17.29% lower than last week, while the number of traders -short is 6.26% higher than yesterday and 17.14% higher than last week.
We usually take the opposite view to the mood of the crowd, and the fact that traders are short indicates an increase in NZD / USD prices.
Traders have a network short than yesterday and last week as well the combination of the current mood and recent changes gives us a stronger bias against NZD / USD-bullish trading.
The Nikkei rises crosswiseJPY
NZD / JPY: After Prime Minister Suga announced (Sept. 3rd) that he will not run for the LDP leader at the end of the month (actually resigning as prime minister), the Nikkei 225 has become stronger, rising nearly 5% to move to over 30,000 and not far from the start of the year at 30,600. Over the weekend, it has emerged that the current vaccine minister, Taro Kono, has become an early favorite, despite not yet having officially run. However, the vaccine minister, who is seen as a supporter of Abenomics, is a bold factor for Nikkei and JPYs. Although the NZD / JPY has recovered strongly from the August lows, cards may rise throughout the month.
NZD / JPY vs Nikkei 225