NZD/USD: To decline further, NZD must break clearly below 0.6050 – UOB Group
|The New Zealand Dollar (NZD) is likely to consolidate between 0.6070 and 0.6120. In the longer run, oversold weakness has not stabilised, but NZD must break clearly below 0.6050 before further sustained decline is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Bears to push towards 0.6050
24-HOUR VIEW: “Two days ago, NZD plummeted to a low of 0.6053. Yesterday, we indicated that ‘the sharp and swift decline appears to be overdone.’ We held the view that instead of weakening further, NZD ‘is more likely to consolidate between 0.6050 and 0.6100.’ Our view turned out to be correct, as NZD traded between 0.6050 and 0.6097. Further consolidation seems likely today, even though the slightly firmed underlying tone suggests a higher range of 0.6070/0.6120.”
1-3 WEEKS VIEW: “Our update from yesterday (10 Oct, spot at 0.6070) remains valid. As highlighted, the oversold in weakness has not stabilised, but NZD ‘must break and remain below 0.6050 before further sustained decline is likely.’ The probability of NZD breaking clearly below 0.6050 will remain intact as long as 0.6145 (no change in ‘strong resistance’ level) is not breached. Looking ahead, the next level to monitor below 0.6050 is 0.6005.”
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