A major reversal higher in the New Zealand Dollar has been met with aggressive selling by the crowd. Notice how the brown negative SSI bars below have recently lengthened confirming that retail traders have increased their short positions.
Our contrarian view of crowd sentiment favors further highs. The sharp build in crowd selling leaves our focus to the topside, and a break of the April peak at 0.8675 seems likely.
NZD/USD looks to be ending March on a high note. The rate tagged the 2013 high this week and is pressing against the line that extends off of the 1996 and 2007 highs.
[B]NZD/USD Weekly Chart[/B]
That line crosses through the 2008, 2011, and 2014 highs as well. In 2011 (record free float high), the rate surged through the line in late July before topping on August 1st.
Does something similar happen here? The channel that defines the advance from the 2011 low is just above the record high in April.
[I]Talking Points:[/I]
• The dollar - like most currencies - is struggling for drive with risk trends meandering and NFP ahead
• Scenarios for sentiment trends and yield forecasts, however, largely support the greenback
• The missing component for a dollar rally is a rebound in market-wide activity and conviction
[B]Daily Chart[/B]
[ul]
[li]Near-term bias shifts lower with break below 9208/18
[/li][li]Subsequent support objectives 9140/47, 9080 & 9046
[/li][li]Breach above 9338 targets resistance at 9394 & 9522
[/li][/ul]
Retail traders turned net-long Gold as it turned down from $1390 and have only increased their buying as the price has declined. Our Speculative Sentiment Index (SSI) shows that long interest (indicated by the green bars in the chart below) is now at its highest since December.
Since SSI is a contrarian indicator, the fact that the majority of retail traders are long Gold suggests that prices could drop further.
Below is a tweet shared this morning by the DailyFX Research team:
$AUDUSD falls to a daily low at 0.9254 and may next find support by the 8/12/13 high at 0.9221
And is that an inverse head and shoulders pattern I see? 
For all their latest trade ideas, you can follow the DailyFX Research team on Twitter.
The Momentum2 strategy is based on our proprietary Speculative Sentiment Index (SSI) a contrarian indicator that looks at the ratio of long to short positions in a currency pair among retail traders.
Instead of simply looking at whether SSI is net short or net long for a given pair, it looks for relative changes in net positioning.
The strategy is currently giving a signal to short GBP/JPY because SSI has hit its most extreme positive level for the past 145 trading hours at -1.263, which suggests that the pair could be trending downwards.
Momentum2 and other DailyFX PLUS Trading Signals can be automated on your FXCM account via the Mirror Trading platform. You can use your trading station login and password to access Mirror Trader.
Thank you soo much for your excellent observation Jason.
The Chinese economy grew at 7.4% over the first quarter of this year. While slightly stronger than the median forecast of 7.3%, it still marks a slowdown from 7.7% the previous quarter. The People’s Bank of China ( PBOC) sets the midpoint around which the trading band of the Yuan may trade.
For the third day in a row they set a weaker midpoint at 6.1589, down 0.03 per cent from the previous day’s 6.1571. It is the lowest level since September, 2013. As a result the Yuan has been trading between 6.2215 and 6.2262 today.
The 6.3000 is a possible target on further Yuan weakness. A stop can be set below the April 9 low of 6.1851. FXCM now offers trading in the offshore Chinese Yuan (USD/CNH)
The Russian Ruble led gains by emerging-market currencies as an agreement to start de-escalating the conflict in Ukraine fueled appetite for “risk-on” trades.
Over the past two days, the Russian Ruble has gained over 3% meaning the USD/RUB currency pair has fallen from a high of 36.30 to 35.20 where trades currently and could once again target the low of 34.75 set at the start of the month.
A deadly clash in eastern Ukraine threw into question the viability of the Geneva accord aimed at easing tensions with Russia.
Genya Savilov/Agence France-Presse — Getty Images
The Russian ruble weakened 0.2% versus the greenback as the USD/RUB rate rose to 35.705:
The ruble is the second-worst performer this year among 24 developing-country currencies monitored by Bloomberg, with a 7.8% decline against the dollar:
usdjpy signal sell 102.59 sl 103.00 1st tp102.39 2nd tp 102.19
This Chinese yuan (USD/CNH) long position from last week is now up over 160 pips as the renminbi presses to fresh 14-month lows with polls showing regional worry.
While the target is still 6.3000, the stop can now be raised to be below the April 13th low of 6.1990.
Hi Rmt2020,
Welcome to BabyPips 
How did you get your sell signal?
PS: I notice you live in Dhaka. Did you watch the recent World T20? Shame about the home team 
Last week’s long USD/CNH (short Chinese Yuan) position from last week is now up over 320 pips as the renminbi continues to make new lows due to key fundamental stresses:
[ul]
[li]Unwinding of commodity-backed loans, complex financing vehicles contribute to CNH selling.
[/li][li]Risks in the shadow present USD/CNH upside potential (Yuan weakness).
[/li][li]Property market developments are disconcerting in the context of middle class, financial exposure.
[/li][li]Developments in the inter-bank market, rural banks, NPLs are possible canaries in the coal mine.
[/li][/ul]
Commodity Backed Loans Unwinding
Gregory Marks commented today in his article on DailyFX.com that "An appreciating Yuan and a one-way bet mentality towards CNY strengthening has created a risky mix of overleveraged vehicles of financing.
Property Prices vs. Stimulus Speculation
“The unwinding could present further upside to the USD/CNH rate if we do see some of these fundamental themes start to pick-up into summer.”
While the target is still 6.3000, the stop can now be raised to be below the April 17th low of 6.2153.
This Chinese Yuan short trade from last week (long USD/CNH at 6.2193 on April 17th) is now up almost 400 pips and an article today in the Wall Street Journal supports the price target of 6.3000:
[B]"The tumble in China’s yuan is showing no signs of letting up, with the currency falling near daily for three straight months as the economy slows, fueling fears that the slide has further to go.
“Analysts and economists expect the yuan to continue sliding, with ING and CIBC forecasting it to touch 6.3 per dollar, which will be its weakest since September 2012 and will mark a close-to-4% tumble in the currency this year, which would be unprecedented.”[/B] source: Yuan Continues Slide, and It Hasn’t Hit Bottom
While the stop can theoretically be moved to just below the April 22nd low of 6.2338, since it’s Friday, it might be best to wait until after the weekend to see how trading opens on Sunday.
The Russian ruble is up about 1% today after the announcement of US sanctions that are less severe than was originally feared by Moscow.
The ruble rose (USD/RUB fell) to 35.85 from 36.05 against the US dollar within minutes of the news from the White House.
“The punitive measures impose travel bans and asset freezes on companies and officials and also tighten licensing requirements for certain hi-tech exports to Russia. But they do not impose sanctions on specific sectors of Russia’s economy and leave the state-held natural gas giant Gazprom untouched.” source: AFP
A short USD/RUB placed at current levels could target that 34.75 low from April 1st, with a stop above the April 15th high of 36.30.
This Chinese Yuan short trade from two weeks ago (long USD/CNH at 6.2193 on April 17th) is now up over 400 pips and the stop can be moved to just under the April 23rd low of 6.23485 locking in over 150 pips of profit.
While the Russian Central Bank has continued spending to defend the value of the ruble, "April’s currency interventions by the Central Bank are the smallest since October last year.
“The Central Bank threw $2.4 billion into shoring up the ruble in April, 9 times less than the $22.3 billion it spent to support the Russian currency in March.” source: Central Bank Spending to Defend Ruble Falls Ninefold in April
That could indicate that the Central Bank believes the ruble has found a bottom, and that USD/RUB might fall from current levels is support of the USD/RUB short trade placed last week.
