The New Zealand Dollar (NZD) could continue to weaken; oversold conditions suggest any decline is unlikely to break below the significant support at 0.6170. Momentum has increased further; NZD could continue to decline to 0.6170, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.
NZD can continue to decline to 0.6170
24-HOUR VIEW: “Yesterday, we noted that ‘there has been a slight increase in momentum.’ We highlighted that ‘while NZD could break below 0.6250, the major support at 0.6225 is still unlikely to come into view.’ The anticipated weakness exceeded our expectations as NZD fell to a low of 0.6211. While NZD could continue to weaken, oversold conditions suggest any decline is unlikely to break below the significant support at 0.6170 (minor support is at 0.6200). Resistance is 0.6235; a breach of 0.6255 would suggest that NZD is not weakening further.”
1-3 WEEKS VIEW: “Two days ago (02 Oct, spot at 0.6285), we noted that ‘downward momentum has increased slightly.’ We held the view that ‘the pullback in NZD could potentially reach 0.6225.’ Yesterday, NZD dropped below 0.6225, reaching a low of 0.6211. Momentum has increased further, and NZD could continue to decline to 0.6170. We will expect NZD to weaken as long as it remains below 0.6295 (‘strong resistance’ previously at 0.6325.).”
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