NZD/USD Is Plunging After NZ Government Coalition & PM Announcement; Profits Locked

Kiwi more than 2% lower after the announcement of New Zealand government coalition and the next Prime Minister. GBP/USD dropped below our target at 1.3100, while USD/JPY edged slightly up early in the morning, reaching our recommended level at 113.20.
The Next Day of New Zealand Coalition in Government; Kiwi Even Lower
The biggest surprise of the day was the coalition happened in the government of New Zealand which dipped the kiwi. On Thursday, it was the largest single-day drop since August 2015, while the currency pair is still falling sharply today. The NZ Frist party agreed to a coalition with the Labour party, while Labour party’s Jacinda Ardern gained enough votes to become the New Zealand’s youngest ever Prime Minister. Changes are coming in the country from this cooperation, including immigration and economic issues that raised fears for the long-term growth and the policy of the RBNZ. The two parties combined will pursue aggressive reforms of the central bank, that means lower interest rates for even longer.
NZD/USD – Technical Outlook
The New Zealand dollar experienced a sharp sell-off against the U.S. dollar and early this morning, recording a five-month low near 0.6970 support level. The commodity currency pair edged sharply lower and lost more than 2% from its performance. It is worth to mention that the pair almost hit our recommended target at 0.6970 and is completing the fourth negative day in a row.

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