(MENAFN- DailyFX) Talking Points:
- NZD/USD to Extend Gains Strong New Zealand Wage Growth. - USDOLLAR Risks Further Losses on Weak ISM Non-Manufacturing Survey. Avoid the pitfalls of trading by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders" series. NZD/USD Chart - Created Using FXCM Marketscope 2.0 Despite the limited market reaction to the Global Dairy Trade auction, NZD/USD may mount a larger advance over the next 24-hours of trading should New Zealand";s Private Wages excluding Overtime are anticipated to increase 0.5% in the second-quarter following the 0.4% expansion during the first three-months of 2016. Even though the Reserve Bank of New Zealand (RBNZ) is widely anticipated to further embark on its easing cycle in 2016, the ongoing recovery in dairy prices accompanied by signs of stronger wage growth may encourage Governor Graeme Wheeler to buy more time at the next interest-rate decision on August 11 as ‘long-term inflation expectations are well-anchored at 2 percent."; Despite the risk for a head-and-shoulders top, the bullish break in the Relative Strength Index (RSI) may generate a larger advance in NZD/USD, with a closing price above 0.7210 (100% expansion) raising the risk for another run at 0.7330 (38.2% retracement) to 0.7340 (61.8% expansion). The DailyFX Speculative Sentiment Index (SSI) shows the retail FX crowd flipped back net-short on July 28, with the ratio hitting an extreme reading during the previous month as it slipped to -2.58. The ratio currently sits at -1.55 as 39% of traders are long, with long positions 18.5% lower from the previous week, while open interest stands 4.6% higher against the monthly average. Why and how do we use the SSI in trading? View our video and download the free indicator here USDOLLAR(Ticker: USDollar): Index Last High Low Daily Change (%) Daily Range (% of ATR) DJ-FXCM Dollar Index 11901.67 11982.15 11890.63 -0.60 160.35% Chart - Created Using FXCM Marketscope 2.0 The USDOLLAR weakens against all of its major counterparts, with the greenback at risk for a further decline as the mixed data prints coming out of the U.S. economy fail to foster expectations for a 2016 Fed rate-hike; may see the reserve currency face additional headwinds over the next 24-hours as the ISM Non-Manufacturing survey is anticipated to narrow to 56.0 in July form 56.5 the month prior. Despite the stickiness in the core Personal Consumption Expenditure (PCE), the Fed";s preferred gauge for inflation, the slack in Personal Income may encourage the Federal Open Market Committee (FOMC) to further delay its normalization cycle as the central bank continues to warn ‘market-based measures of inflation compensation remain low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months."; The USDOLLAR is coming up against a near-term area of interest around 11,898 (50% retracement) to 11,914 (38.2% retracement), with a break/close below the Fibonacci overlap opening up the next downside target around 11,822 (23.6% retracement) to 11,843 (38.2% retracement). Click Here for the DailyFX Calendar Get our top trading opportunities of 2016 HERE Check out FXCM";s Forex Trading Contest Read More: S & P 500: Sharply Unchanged, Consolidating or Topping? COT-British Pound Ownership Profile Warns of a Bottom Post-Brexit NZDUSD Support Vulnerable to Weak NZ Trade Balance USD/JPY July Recovery at Risk on Wait-and-See FOMC/BoJ Policy --- Written by David Song, Currency Analyst To contact David, e-mail . Follow me on Twitter at DavidJSong. To be added to David's e-mail distribution list, please follow this link.
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