NZD/USD: Does not have enough momentum to reach 0.5770 – UOB Group

The New Zealand Dollar (NZD) could drop further; at this time, it does not appear to have enough momentum to reach 0.5770 for now. In the longer run, downward momentum is beginning to build; NZD is expected to weaken to 0.5770, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD is expected to weaken to 0.5770 in the longer run

24-HOUR VIEW: “Yesterday, when NZD was at 0.5855, we held the view that ‘provided that 0.5825 is not breached, NZD could edge higher to 0.5880.’ Our expectation did not materialize as NZD traded in a 0.5837/0.5869 range. NZD closed at 0.5845, but fell sharply in early Asian trade today. The sharp drop has scope to extend, but at this time, NZD does not appear to have enough momentum to reach the major support at 0.5770. Note that there is another support level at 0.5795. Minor resistance is at 0.5835; any rebound is likely to remain below 0.5855.”

1-3 WEEKS VIEW: “Our most recent narrative was from last Friday (22 Nov, spot at 0.5860), wherein ‘While the underlying tone has softened, any decline is likely part of a lower trading range of 0.5815/0.5905.’ We stated, ‘NZD is unlikely to break clearly below 0.5815.’ After dropping sharply early today, downward momentum is beginning to build. We expect NZD to weaken to 0.5770. We will maintain the same view provided that 0.5875 is not breached.”