This weekend sees “Equinox” general elections in New Zealand on Saturday and Germany on Sunday. As New Zealand moves into Spring the balance of the equinox and Kiwi politics has been called into question. The rapid rise of the opposition Labour party, under its new leader Jacinda Arden has drawn bizarre parallels with both Jeremy Corbyn in the UK and Donald Trump in the USA. The opinion polls in New Zealand have had the incumbent PM (Bill English) ahead, but last week for the first time Labour took the lead briefly. It’s another general election too close to call with experience and continuity being pitted against inexperience and the “fresh start” of the outsider. I have been LONG (two positions) NZDUSD from a break of the 20 day SMA on September 14; target 1 was reached on September 20 for a net gain of 145 pips. Target 2 remains at 0.7446.
The German Autumn Equinox election appears much more straightforward, Mrs Merkel will be re-elected and her collation government will press ahead reinvigorated. The only key risk will is the impact the nationalist AfD and its share of the popular vote. The 2017 rally of EURUSD now pivots around 1.2000. The German election, the final and least uncertain of the key European elections this year (the Dutch and French out comes were much less certain and Italy is still to decide on elections) means a continuity for the EU project and the single currency. I have a SHORT position on EURUSD from September 14, again on the break of the 20 day SMA, which came close to being stopped out following the FOMC decision but remains open to target at 1.1823.
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