After all, following last elections, New Zealand needed a coalition government. First leader Peter decided to form a government with Jacinda from the Labor party saying that at the end of the day, a choice had to be made.
That change was inevitable and what happened next was a Kiwi slide. While we cannot really blame New Zealand’s leadership despite what the Labor party brings on the table, the opposition argues that the economy needs to expand more that it is doing right now.
Therefore, going forward a raft of policies to improvement employment, control immigration and put an end or atleast regulate foreign buys of land and homes shall be implemented.
The Aussie benefited from that slide and is now at is 13 month’s high. Fundamentals benefited the Aussie as unemployment ticked lower to 5.5%, the lowest in 5 years while the economy created 19.8K more jobs in September.
This time round though, the number of full time and part time job expanded at almost the same pace. Positive industrial and retail sales in china helped boosted the Aussie but there was caution from the PBOC against excessive optimism.
Other than these, Japan will have their elections on Sunday where Abe is widely expected to maintain his 2/3 majority and that should boost the Yen.
As a chartist, stochastics shows that this pair is over extended to the upside and given the elections, I expect the Yen to gain. There is a sell signal in place and in lower time frames prices are moving lower. There is a double top in the 4HR chart where prices are finding it hard to close above 89. With a sell signal in the 1HR chart and a break below support trend line in this time frame, I will look to enter short and place my stop loss above $89.
Trading will be as follows:
Stop Loss: 89.20
Take Profit: 86.00
Have a good trading time and enjoy your weekend.