NZD/USD: Above 0.5725, weakness in NZD has stabilised – UOB Group
New Zealand Dollar (NZD) could continue to rebound but any advance is likely part of a 0.5670/0.5725 range. In the longer run, if NZD breaks above 0.5725, it would mean that the weakness has stabilised, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
NZD can continue to rebound today
24-HOUR VIEW: "Following the sharp drop in NZD two days ago, we indicated yesterday that 'the oversold decline has not stabilised.' We also indicated that NZD 'could drop further, but a sustained break below 0.5640 is unlikely.' Our expectations did not turn out, as NZD rebounded to close higher by 0.40% at 0.5701. While NZD could continue to rebound today, any advance is likely part of a 0.5670/0.5725 range. In other words, NZD is unlikely to break clearly above 0.5725."
1-3 WEEKS VIEW: "We revised our view to negative last Wednesday (26 Mar, spot at 0.5730), indicating that NZD 'is likely to edge lower toward the major support zone between 0.5650 and 0.5670.' After NZD plummeted below the support zone, we indicated yesterday (01 Apr, spot at 0.5670) that 'the rapid increase in momentum suggests NZD is likely to continue to head lower.' However, we pointed out, 'the next support at 0.5610 may not come into view so quickly.' We did not anticipate NZD to rebound to 0.5704. From here, if NZD breaks above 0.5725 (no change in ‘strong resistance’ level from yesterday), it would mean that the weakness in NZD has stabilised."
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FXStreet Insights Team
FXStreet
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