NZD Approaches Key Supply Zone: A Potential Short OpportunityThe New Zealand dollar is approaching a critical supply area that has captured our attention, signaling a potential opportunity to set up a short position. This zone is key, and we are closely monitoring for a possible test of this area to confirm our bearish setup. However, it's important to note that the price may reverse before reaching this point of interest, as other correlated currencies against the U.S. Dollar (DXY) have already begun to show signs of reversal.
This correlation between the New Zealand dollar and other currencies in relation to the U.S. Dollar strengthens the likelihood of a potential downturn before our targeted area is tested. As the DXY starts to gain momentum, the pressure on the New Zealand dollar could increase, leading to an earlier-than-expected reversal.
Given these market dynamics, we are prepared to act quickly should the price show signs of turning before reaching our anticipated level. This situation highlights the importance of flexibility and vigilance in our trading strategy, as the interplay between correlated currencies can often signal shifts in market direction.
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