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Two days ago in my recent webinar I've been calling out the possibility of a bottom in kiwi. I'm not expecting a full reversal just a rally inside a bearish trend or a correction as nothing goes up or down in a straight line. Even last month I've been warning that we need to prepare for a bounce but also highlighting that timing the bounce is key, you can read what I had to say back then here: NZ Dollar COT Extreme
The reason why I've been waiting for a bounce at beginning of July was because of the strong pattern and tendencies of NZD/USD to rally. In Figure 1 we can see this seasonality pattern and we can set some expectations based on this pattern. Yesterday after NFP we had the first sign that we may be bottoming, after 7 consecutive down weeks maybe it's time for a pause and the timing couldn't be better.
Also the COT Report over the last weeks has been pointing towards a reversal as the commercials have been starting accumulating positions in NZ Dollar and have become net buyers and it's moving at extreme levels. Taking in consideration all the above I think that this may be a good opportunity in July to try to be buyers of NZD/USD.
Best Regards,
Daytrader21
Figure 1: NZD/USD Seasonality
The reason why I've been waiting for a bounce at beginning of July was because of the strong pattern and tendencies of NZD/USD to rally. In Figure 1 we can see this seasonality pattern and we can set some expectations based on this pattern. Yesterday after NFP we had the first sign that we may be bottoming, after 7 consecutive down weeks maybe it's time for a pause and the timing couldn't be better.
Figure 2: NZ Dollar COT Report
Also the COT Report over the last weeks has been pointing towards a reversal as the commercials have been starting accumulating positions in NZ Dollar and have become net buyers and it's moving at extreme levels. Taking in consideration all the above I think that this may be a good opportunity in July to try to be buyers of NZD/USD.
Best Regards,
Daytrader21
