Shorting the Retrace in NZD/USD - Forex News by FX Leaders
Buyers seem a bit exhausted now

Shorting the Retrace in NZD/USD

Posted Tuesday, February 4, 2020 by
Skerdian Meta • 1 min read

NZD/USD has been bearish for about a month, since it reversed down at the beginning of January. The geopolitical tensions between US and Iran and the outbreak of coronavirus have turned the sentiment negative and risk assets such as commodity Dollars have turned massively bearish.

NZD/USD has lost more than 300 pips during this time and moving averages have turned into resistance. They have killed all retraces higher, which have been pretty weak to be honest, as the H4 chart above shows. As the downtrend picked up pace in the last couple of weeks, the smaller period MAs came into play and last week even the 20 SMA couldn’t catch up with the price, as the decline continued.

This week though, the sentiment has improved somewhat, as we mentioned above and the price is trading around the 20 SMA, after it caught up. The sentiment has improved further today , so we are seeing a retrace higher. We decided to take this opportunity and go short on NZD/USD, since it has made minor gains compared to AUD/USD and other risk currencies.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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