FX.co ★ UFCworriers | NZD/USD

The New Zealand Dollar (NZD) is trading weaker against the US Dollar (USD) at around 0.5620 during the European session on Monday. The Kiwi currency pair is under downward pressure despite some recovery in the greenback, ahead of the US midterm elections on Tuesday. At the time of writing, the US Dollar Index (DXY), which measures the greenback's performance against six major currencies, is down 0.3% at around 101.70, despite recovering some losses from an intraday low of 101.43. For ING's Chris Turner, a clear risk factor is the US midterm elections, "as betting markets assign a 70-72% chance to the Democrats taking both the House and the Senate." According to Turner, "the case can certainly be made that the Dollar should trade lower under such circumstances," as this would mean that "there would be gridlock over the debt ceiling issue, government shutdowns next year, and it may embolden President Trump in pursuing even a more activist foreign policy agenda." In light of this situation, Chris Turner says that investors would be looking at these political factors in light of the positive fundamentals – high growth, high inflation and interest rate hikes from the FED - in favor of the USD and DXY levels of 102.00. Later in the day, investors will look ahead to the US ISM Manufacturing PMI numbers for October, scheduled for release at 15:00 GMT. As far as the New Zealand (NZ) economic calendar is concerned, investors will be getting Q3 labor market data, which is scheduled for release on Wednesday. The Unemployment Rate is expected to fall to 5.5% from 5.6%. On the daily chart, NZD/USD stands at 0.5623, maintaining its short-term bearish tone while trading below the 20-day Exponential Moving Average (EMA) at 0.5655. The currency pair continues to fall after failing to hold its brief recovery rally in mid-October, with price contained below the short-term EMA, indicating that selling pressure is still prevailing. The 14-day RSI at around 41 is below the neutral 50 line, showing weak buying momentum without being oversold. Resistance levels on the upside are seen at the 20-day EMA at 0.5655, and a breakout above this level will be required to change the bearish tone and allow for a corrective rally. On the downside, support is at the October 14 low of 0.5564; a break below this level will lead to a new downtrend.