NZD/USD: A sustained break below 0.6250 is unlikely – UOB Group
|The New Zealand (NZD) could continue to weaken; oversold conditions suggest a sustained break below 0.6250 is unlikely. In the longer run, downward momentum has increased slightly; pullback in NZD could potentially reach 0.6225, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
NZD can fall to 0.6225 in the longer run
24-HOUR VIEW: “Our view of sideways trading yesterday was incorrect, as NZD fell sharply to 0.6265 before closing on a weak note at 0.6281 (-1.13%). Unsurprisingly, the sharp drop has resulted in an increase in momentum. Today, while NZD could continue to weaken, oversold conditions suggest a sustained break below 0.6250 is unlikely. The major support at 0.6225 is also unlikely to come into view. To keep the oversold momentum going, NZD must not break above 0.6325 with minor resistance at 0.6305.”
1-3 WEEKS VIEW: “We have expected a higher NZD since late last week (as annotated in the chart below). After NZD rose to 0.6379, we highlighted yesterday (01 Oct, spot at 0.6345) that “there has been no further increase in momentum, and it remains unclear if NZD could rise further to 0.6410.” We also highlighted that “only a breach of 0.6280 (‘strong support’ level) would mean that 0.6410 is not coming into view.” NZD then fell sharply, breaking below 0.6280 (low of 0.6265). Not only upward momentum has faded, but downward momentum has also increased, albeit not much. At this time, we view the current price movements as a pullback that could potentially reach the significant support at 0.6225. We will hold the same view provided that 0.6350 (‘strong resistance’ level) is not breached.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.