Wall Street IG Client Sentiment: Our data shows traders are now net-long Wall Street for the first time since Jun 30, 2021 when Wall Street traded near 34,570.80.

Wall Street IG Client Sentiment: Our data shows traders are now net-long Wall Street for the first time since Jun 30, 2021 when Wall Street traded near 34,570.80.

Number of traders net-short has decreased by 20.40% from last week.

SYMBOL TRADING BIAS NET-LONG% NET-SHORT% CHANGE IN LONGS CHANGE IN SHORTS CHANGE IN OI Wall Street BEARISH 50.90% 49.10% 78.85% Daily 106.19% Weekly -11.28% Daily -20.40% Weekly 19.33% Daily 15.78% Weekly

Wall Street: Retail trader data shows 50.90% of traders are net-long with the ratio of traders long to short at 1.04 to 1. In fact, traders have remained net-long since Jun 30 when Wall Street traded near 34,570.80, price has moved 2.14% lower since then. The number of traders net-long is 78.85% higher than yesterday and 106.19% higher from last week, while the number of traders net-short is 11.28% lower than yesterday and 20.40% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Wall Street prices may continue to fall.

Our data shows traders are now net-long Wall Street for the first time since Jun 30, 2021 when Wall Street traded near 34,570.80. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Wall Street-bearish contrarian trading bias.

New Zealand Dollar Forecast: NZD/USD Up on Sentiment Recovery, OCR Bets

New Zealand Dollar, NZD/USD, AUD/NZD, Covid, Risk Trends, RBNZ - Talking Points

New Zealand Dollar gains against most peers as global sentiment recovers

RBNZ interest rate bets swing higher as Covid-related growth worries subside

NZD/USD bounce puts psychological level back in focus as potential resistance

Thursday’s Asia-Pacific Outlook

Asia-Pacific traders will look to build on Wall Street’s upbeat session where stocks closed higher, extending a rebound into its second day after a broad risk-off move sank markets on Monday. The benchmark S&P 500 closed 0.82% higher on Wednesday, moving the index within 1% of last week’s all-time high. The foreign exchange market is reflecting the new round of buying, with the risk-sensitive New Zealand Dollar gaining against most of its major currency peers.

The Kiwi Dollar’s fundamental backdrop improved after the Reserve Bank of New Zealand (RBNZ) moved to terminate its Large Scale Asset Purchases (LSAP) program on July 23. The RBNZ’s shift sent rate hike bets skyward as traders priced in the hawkish move. Growing concern about the Delta variant of Covid-19, particularly in the Asia-Pacific region, saw those bets ebb earlier this week. But the recovery in global sentiment has revived the trade, evidenced by a rebound in overnight indexed swap (OIS) rates. This is a derivative instrument reflecting expectations of future changes in the Official Cash Rate (OCR).

Still, Australia highlights the Delta strain’s growing threat in the region, as low vaccination rates force policy makers to ramp up restrictive measures. The bulk of trans-Tasman travel is suspended. Three Australian states under lockdown, accounting for nearly half of the country’s population. New Zealand, on the other hand, remains largely free of community-based infections. That gives the Kiwi economy an edge in prospective growth versus Australia. That disparity is reflected in exchange rates, with AUD/NZD down more than 1.5% on the month. That’s the worst monthly performance this year. A big miss on Australia’s retail sales figure for June dragged the currency pair lower overnight.

Elsewhere, US Dollar strength—driven by strong economic data and Fed rate hike bets—has outperformed the New Zealand Dollar this month, although NZD/USD looks to be eating away at losses following an overnight gain. If risk aversion stays subdued, it will likely bode well for the Kiwi Dollar. The economic docket for the rest of this week is void of any high-impact events, which may leave prevailing risk trends unchecked. Next week will see the island nation’s trade balance figures cross the wires. The Fed’s July rate decision could also spur some significant volatility in NZD/USD next week.

Today’s session, however, offers little fodder for event-driven trading. Japan will release foreign bond investments data for the week ended July 17, and Thailand will see its June trade figures cross the wires. Indonesia is set to keep rates steady at 3.5%, according to the DailyFX Economic Calendar. Tonight, rate traders will set their eyes on the European Central Bank’s rate decision, which could see a volatile reaction in EUR/USD.

NZD/USD Technical Outlook:

An overnight recovery in NZD/USD has put the 0.7000 psychological level back in focus. Prices are drifting higher, with the 38.2% Fibonacci retracement appearing to offer a small degree of resistance currently. A break above the 0.7000 level would see the falling 26-day Exponential Moving Average shift into focus.

Alternatively, a move lower would threaten to add to a series of lower lows. However, the RSI oscillator has not moved in lockstep with prices, forming bullish divergence and thereby hinting that downside momentum is being exhausted.

NZD/USD 8-Hour Chart

Chart created with TradingView

New Zealand Dollar TRADING RESOURCES

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwateron Twitter

EUR/CHF IG Client Sentiment: Our data shows traders are now at their most net-long EUR/CHF since Jan 19 when EUR/CHF traded near 1.08.

Number of traders net-short has decreased by 57.79% from last week.

SYMBOL TRADING BIAS NET-LONG% NET-SHORT% CHANGE IN LONGS CHANGE IN SHORTS CHANGE IN OI EUR/CHF BEARISH 78.11% 21.89% 6.42% Daily 11.54% Weekly -53.57% Daily -57.79% Weekly -17.04% Daily -17.96% Weekly

EUR/CHF: Retail trader data shows 78.11% of traders are net-long with the ratio of traders long to short at 3.57 to 1. Our data shows traders are now at their most net-long EUR/CHF since Jan 19 when EUR/CHF traded near 1.08. The number of traders net-long is 6.42% higher than yesterday and 11.54% higher from last week, while the number of traders net-short is 53.57% lower than yesterday and 57.79% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests EUR/CHF prices may continue to fall.

Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/CHF-bearish contrarian trading bias.