FX Strategists at UOB Group believe NZD/USD could slip back below the key 0.60 support in the near term.
Key Quotes
24-hour view: “We did not foresee the sharp sell-off in NZD that sent it plunging by -1.32% (NY close of 0.5995), the largest 1-day decline in one month. While clearly oversold, there appears to be room for another leg lower towards 0.5960 first before the current weakness should stabilize. Resistance is at 0.6020 but the stronger level is at 0.6050.”
Next 1-3 weeks: “Yesterday, NZD dropped below the expected 0.6000/0.6130 consolidation range that we highlighted on Tuesday (12 May, spot at 0.6060). The rapid pick-up in momentum suggests further NZD weakness is likely towards 0.5920. At this stage, the prospect for a sustained decline below this strong support is not high. Overall, NZD is expected to trade on its back foot unless it can move back above 0.6085 (‘strong resistance’ level).”
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