What Happened
New Zealand Prime Minister Christopher Luxon confirmed on Wednesday that his government will trim new spending and maintain its path to a budget surplus, citing global uncertainties including the Middle East conflict. While this is a New Zealand fiscal story, it carries direct read-through for Australian markets given the close economic ties between the two nations and shared sensitivity to global risk sentiment.
Key Levels to Watch
The NZD/USD and AUD/USD tend to move in tandem during risk-off events. For ASX-linked traders, the key levels to monitor are:
- ASX 200 Support: 7,580 (near-term) and 7,420 (major floor)
- ASX 200 Resistance: 7,780 and 7,900 (psychological ceiling)
- Gold (XAU/USD) Support: $2,300 and $2,265
- Gold (XAU/USD) Resistance: $2,390 and $2,430
Technical Picture
The ASX 200 remains in a short-term downtrend after failing to hold above 7,780 resistance last week. The 50-day moving average sits at approximately 7,650, which is now acting as near-term support. RSI is hovering around 44 โ not yet oversold, suggesting there is room for further downside before a technical bounce becomes compelling.
Gold is the standout beneficiary of rising Middle East tensions, trading above its 20-day and 50-day moving averages. The bullish trend in XAU/USD remains intact while price holds above $2,300.
What Traders Are Watching
- A break below 7,580 on the ASX 200 would likely trigger stop-losses and accelerate selling toward 7,420.
- Gold holding above $2,300 keeps the bullish setup alive โ a close above $2,390 opens the door to fresh all-time highs.
- Financials like CBA, ANZ, WBC and NAB are vulnerable if risk sentiment deteriorates further โ watch CBA’s $115.00 support level closely.
Bias
Neutral-to-Bearish on ASX 200 | Bullish on Gold. Fiscal conservatism from New Zealand adds to a broader risk-off tone. With Middle East uncertainty unresolved, defensive positioning and gold exposure make more sense than chasing ASX upside at current levels.