NZD/USD still failing in a bid to get above 0.6600
This comes as the pair is still finding it difficult to find a firm break of the 61.8 retracement level @ 0.6594. That remains the key resistance level for the pair in trading at the moment. The kiwi is continuing some good momentum from yesterday's trading but the same struggles remain.
The near-term bias in the pair remains more bullish as price holds above the two key hourly moving averages but unless price is able to sustain a break of the 0.6600 handle, it feels like a matter of time before exhaustion kicks in and the whole episode of "one step forward, two steps back" will continue for NZD/USD.
The daily chart explains that much better as the pattern of lower highs and lowers lows continue to dominate the technical picture in trading the pair since April this year. As mentioned yesterday, unless price breaks above the 0.6700 handle, there is not much of a reason to believe the trend here won't continue.
Much like the AUD/USD, the only thing I see working in favour of the kiwi now is that short positions are extremely crowded. Looking at CFTC data, it's the most ever on record and that suggests that any corrections in the pair can be rather painful when the time comes.
Fundamentally nothing much has changed and once the unwinding of shorts are out of the way, expect the pair to continue to track lower again. That said, given positioning data, a squeeze higher from hereon towards 0.6700 can't be ruled out but first we must observe a break of the 0.6600 handle.
