Market sentiment evaluation:
- Market confidence has dropped slightly however the main themes of stronger US shares and a firmer US Greenback will seemingly re-emerge.
- Within the meantime, IG consumer sentiment information are sending out a bearish sign for NZD/USD forward of one other anticipated rate of interest enhance in New Zealand tomorrow.
Dealer confidence stays excessive
Dealer confidence continues to be lofty within the markets and that ought to be certain that the key themes of stronger US inventory indexes and a firmer US Greenback reassert themselves after a pause for breath. Because the EUR/USD chart under exhibits, the pair is modestly greater Tuesday however the downward development stays intact, with the USD helped by the re-nomination of Jay Powell as Fed chairman.
EUR/USD Value Chart, Each day Timeframe (Could 20 – November 23, 2021)
Chart by IG (You’ll be able to click on on it for a bigger picture)
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Turning to the IG consumer positioning information, the numbers are at present sending out a bearish sign for NZD/USD although the Reserve Financial institution of New Zealand is broadly anticipated to observe up its October curiosity price enhance with one other 25-basis-point elevate at its assembly Wednesday.
The retail dealer information present 54.91% of merchants are net-long, with the ratio of merchants lengthy to quick at 1.22 to 1. The variety of merchants net-long is 1.49% decrease than yesterday however 30.95% greater than final week, whereas the variety of merchants net-short is 6.87% decrease than yesterday and 23.88% decrease than final week.
Right here at DailyFX, we usually take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests NZD/USD might proceed to fall. Merchants are additional net-long than yesterday and final week, and the mix of present sentiment and up to date modifications provides us a stronger NZD/USD-bearish contrarian buying and selling bias.
On this webinar, I appeared on the traits within the main forex, commodity and inventory markets, on the forward-looking information on the financial calendar this week, on the IG Consumer Sentiment web page on the DailyFX web site, and on the IG Consumer Sentiment reviews that accompany it.
— Written by Martin Essex, Analyst
Be at liberty to contact me on Twitter @MartinSEssex
DailyFX gives foreign exchange information and technical evaluation on the traits that affect the worldwide forex markets.