NZDUSD downside may still have a lot more room to run
After NZDUSD traverses today’s US employment report, attention will turn to the announcement of the result of the recent New Zealand election on Saturday; more specifically the results from the special votes for the September 23 election. The election night seats-in-Parliament split is likely to change and influence the process of forming a new government.
Most commentators expect the specials will go in favour of opposition parties, increasing the odds the sitting National Party government will be displaced by a Labour/Greens/NZ First coalition.
In accordance with my Elliott Wave analysis the Kiwi has sold-off well and now the kiwi displays a possible 3-month head and shoulders classical charting reversal formation (see daily chart below), with a sustained break below Neckline support, currently at .7085, establishing a downside target of 0.6700 over the coming weeks.
Entry: Today: Kiwi is seen as a Sell at 0.7115/0.7125 (a move below 0.7085 first would however cancel this).