Key Moments
- AUD/NZD drops nearly 0.7% and trades below 1.2300, approaching support around 1.2265-1.2270.
- Provisional New Zealand election results show the governing coalition holding 67 of 131 seats, lifting the New Zealand Dollar.
- Technical indicators signal persistent downside momentum, with key resistance now seen from 1.2335 to 1.2425.
Political Backdrop Lifts New Zealand Dollar
The Australian Dollar weakened sharply against the New Zealand Dollar on Monday, with AUD/NZD extending its losses as political developments in Wellington buoyed the Kiwi. The cross has fallen about 0.7% so far in the session, setting fresh three-week lows just under the 1.2300 handle. Sellers are increasingly focused on the lower boundary of the recent two-month trading range, clustered between 1.2265 and 1.2270.
Initial election tallies in New Zealand indicate that Prime Minister Christopher Luxon’s center-right National Party, together with its coalition partner, the Labour Party, have secured 67 of the 131 seats in parliament, which would amount to a slim governing majority. Final results are not expected until November 27, and leaders of the main parties have stated they will postpone coalition negotiations until those figures are confirmed.
China Data Delivers Mixed Signals for Antipodean Currencies
On the macroeconomic side, economic releases from China on Monday painted a mixed picture. The Consumer Price Index rose 0.7% year-on-year in October, slowing from 0.9% in September. In contrast, the Producer Price Index jumped 5.7% compared with a year earlier, marking its fastest pace in more than four years. Both the Australian Dollar and the New Zealand Dollar saw gains following these data points.
Technical Outlook: Downtrend Targets Key Support Zone
AUD/NZD is currently quoted at 1.2299, continuing its retreat from the late-October highs and trading below the lower boundary of a descending channel. On the 4-hour chart, momentum signals remain clearly negative. The 14-period Relative Strength Index is approaching, but has not yet reached, oversold territory. Meanwhile, the Moving Average Convergence Divergence histogram is displaying increasingly large red bars, reflecting the risk of additional downside before any notable rebound takes hold.
With the pair trading south of 1.2300, sellers are likely to focus on retesting the lows registered on September 8 and October 16, situated in the 1.2265-1.2270 band. A further break below that area would put the September 4 trough at 1.2220 on the radar, although this objective appears less likely to be achieved over the very near term.
On the upside, initial resistance is now aligned with the descending channel’s lower boundary near 1.2335. Above that, attention turns to the former support zone just ahead of 1.2375, which corresponds to the lows from November 5 and 6. The next notable barrier is located around 1.2425, where Friday’s high converges with the top of the channel.
New Zealand Dollar Performance Against Majors
The table below summarizes the New Zealand Dollar’s performance against major counterparts on the day. According to the data, the New Zealand Dollar has shown the strongest appreciation versus the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.38% | -0.47% | -0.38% | -0.26% | -0.41% | -0.99% | -0.31% | |
| EUR | 0.38% | -0.09% | 0.00% | 0.12% | -0.03% | -0.62% | 0.07% | |
| GBP | 0.47% | 0.09% | 0.11% | 0.20% | 0.05% | -0.54% | 0.15% | |
| JPY | 0.38% | 0.00% | -0.11% | 0.12% | -0.03% | -0.62% | 0.07% | |
| CAD | 0.26% | -0.12% | -0.20% | -0.12% | -0.15% | -0.74% | -0.05% | |
| AUD | 0.41% | 0.03% | -0.05% | 0.03% | 0.15% | -0.59% | 0.10% | |
| NZD | 0.99% | 0.62% | 0.54% | 0.62% | 0.74% | 0.59% | 0.69% | |
| CHF | 0.31% | -0.07% | -0.15% | -0.07% | 0.05% | -0.10% | -0.69% |
The heat map reads using the currency in the left-hand column as the base and the currency in the top row as the quote. For instance, selecting the New Zealand Dollar from the left and moving across to the US Dollar cell shows the percentage change for NZD (base) against USD (quote).
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