The NZD/USD is near the 0.65040 ratios as of this writing as the currency pair seemingly shows the ability to sustain higher values. On Wednesday of last week, the NZD/USD shot up to around 0.65300 vicinities after U.S Retail Sales figures came in weaker than expected. However, on Thursday in New Zealand, it was announced the Prime Minister had resigned and a new leader would be announced.
Leadership Change Caused Volatility in the NZD/USD
The abrupt change of leadership in New Zealand sent the NZD/USD to a low of nearly 0.63650 on Thursday, but the lower values did not last long. Upon the news of political change financial houses caught their collective breath and the NZD/USD began to reverse higher.
Not only did buying show the NZD/USD was strong, but it started to prove perceived resistance levels were not durable. The NZD/USD went into the weekend near the 0.64700 level which was a solid bullish signal that the financial world viewed the political upheaval and resignation of Prime Minister Jacinda Ardern as a positive.
Labour Party has a New Leader and Faces October 2023 Elections
There will be a national election in New Zealand in October of this year. The public will have a while to consider the new leadership which is now at the helm in New Zealand. Public dismay over Ardern’s leadership which caused much of her downfall and the current government’s troubles may face a voting backlash still in October. The upwards momentum in the NZD/USD to highs and its ability to sustain values early today are signals change was wanted by the business community.
New Zealand will release its Consumer Price Index figures early on Wednesday and the result will affect the NZD/USD. Fundamental data will be important the remainder of the week because the U.S is going to publish PMI statistics today, Gross Domestic Product (growth) numbers on Thursday and there will be U.S inflation data on Friday. However, technical traders have a solid bit of chart data too that could be vital.
- If the NZD/USD remains above the 0.65000 level in the near term this could be bullish. Resistance near current highs has proven difficult however, but if the NZD/USD were to challenge the 0.65300 to 0.65400 level buyers may believe more upside is possible.
- In June of 2022 the NZD/USD traded near the 0.65500 value, this before starting a bumpy path downward. However, in March of 2022, the NZD/USD was trading near the 0.69800 vicinities.
Behavioral Sentiment will be a key for the NZD/USD in the near term as financial houses digest the political change and coming economic data which will factor into central bank policy. Speculators should remain cautious today and tomorrow. Perhaps seeking upside buying positions after a reversal lower towards short-term support may be worthwhile for conservative traders.
NZD/USD Short-Term Outlook:
Current Resistance: 0.65210
Current Support: 0.64930
High Target: 0.65666
Low Target: 0.64650
Ready to trade our Forex daily analysis and predictions? Here are the best forex brokers in New Zealand to choose from.