The NZD/USD pair fell sharply today to more than a four-month low after it became clear that the First Party will be coalited with Labor and Greens to form a government.
This announcement was not well accepted by the markets because the risk of taking measures for correcting the New Zealand dollar overvaluation by the new government is increasing.
In the late Asian session the NZD/USD pair dropped with over 1.5% and as the time of writing the price is 0.7037. As seen on the four hour time frame the price is below all its moving averages and also broke to below the 61.8% Fibonacci retracement of latest May to July bullish run, at 0.71. Indicators on the same chart are showing strong bearish momentum and are located within their extreme oversold areas. Having in mind above, it seems that further weakness is expected and the bears might test the psychological support at 0.7000.
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