NZD/USD: More likely to trade in a 0.5585/0.5630 range – UOB Group
Instead of weakening further, New Zealand Dollar (NZD) is more likely to trade in a 0.5585/0.5630 range. In the longer run, room for NZD to continue to weaken; it remains to be seen if 0.5565 is within reach, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Room for NZD to continue to weaken
24-HOUR VIEW: "When NZD was at 0.5630 in early Asian trade last Friday, we noted that 'although deeply oversold, NZD could decline further.' However, we held the view that '0.5590 is likely out of reach for now.' NZD weakened more than expected, reaching a low of 0.5587. Conditions remain deeply oversold. This, combined with slowing momentum suggests that instead of weakening further, NZD is more likely to trade in a 0.5585/0.5630 range."
1-3 WEEKS VIEW: "Last Thursday (27 Feb, spot at 0.5700), we highlighted that 'downward momentum is beginning to build, and if NZD breaks and remains below 0.5680, it could trigger a decline to 0.5645.' After NZD dropped sharply, we highlighted last Friday (28 Feb, spot at 0.5630) that 'the price action suggests further NZD weakness, and the level to monitor is 0.5590.' NZD then dropped to 0.5587. While we continue to see room for NZD to weaken, it remains to be seen if the next support level at 0.5565 is within reach. On the upside, a breach of 0.5670 (‘strong resistance’ level was at 0.5685 last Friday) would indicate that NZD is not weakening further."
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FXStreet Insights Team
FXStreet
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