- AUD/NZD has retraced dip below 50-DMA and bounced higher to break above 5-DMA at 1.0897.
- 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.
- AUD/NZD has paused 3 successive weeks of downside, we see further weakness only on close below 50-DMA.
- Decisive break below 50-DMA will see further drag, scope then for test of 100-DMA at 1.0703.
- Minor trendline resistance seen at 1.1020, break above could see test of major trendline resistance at 1.1155.
Support levels - 1.09, 1.0897 (5-DMA), 1.0866 (50-DMA), 1.0848 (38.2% Fib retracement of 1.0370 to 1.1143 rally)
Resistance levels - 1.0961 (23.6% Fib), 1.0993 (weekly 5-SMA), 1.1020 (minor trendline resistance), 1.1155 (major trendline resistance)
Recommendation: Wait for clear directional bias.
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