- NZD/USD opened with a bearish gap and edged lower to hit 1-week lows at 0.7251.
- Kiwi dented after New Zealand election results provided no clear victory and increased political uncertainties.
- Provisional results showed National: 46% / 58 seats; Labour 35.8% / 45 seats; NZ First 7.5% / 9 seats; Greens 5.9% / 7 seats; ACT 0.5% / 1 seat.
- It will still be some time before we know the make-up of the new government and uncertainty to weigh on the bird.
- The pair has held above strong support at 20-DMA (0.7250), we see weakness on break below.
- Technical indicators have turned bearish, RSI below 50 levels and biased lower, Stochs point south.
- Break below 20-DMA finds next immediate support at 100-DMA at 0.7234 ahead of major trendline at 0.72.
- On the flipside, we see bearish invalidation on on breakout above daily cloud.
Support levels - 0.7250 (20-DMA), 0.7234 (100-DMA), 0.72 (trendline)
Resistance levels - 0.7275 (38.2% Fib retracement of 0.68176 to 0.7558 rally), 0.7316 (5-DMA), 0.7383 (200 W SMA)
Recommendation: Good to go short on break below 20-DMA, SL: 0.7275, TP: 0.7234/ 0.72/ 0.7185
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