NZD/USD faces strong support around 0.5880 – UOB

Pablo Piovano FXStreet

In the view of UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, extra downside in NZD/USD is likely to meet a tough support around 0.5880.

Key Quotes

24-hour view: Yesterday, we expected NZD to consolidate. Our expectation was incorrect as it plunged to a low of 0.5944 before ending the day on a weak note at 0.5948 (-0.84%). Unsurprisingly, the rapid drop is oversold, but with no signs of stabilisation just yet, NZD is likely to weaken further. However, any decline is unlikely to reach 0.5880 today (there is another support at 0.5910). Resistance is at 0.5970, followed by 0.5990.

Next 1-3 weeks: After NZD soared to a high of 0.6044 last Friday (29 Sep), we highlighted that “the improving upward momentum suggests NZD could test and potentially break above the resistance at 0.6050.” We added, “a breach of 0.5930 would suggest that NZD is not ready to test 0.6050.” NZD then fell sharply and reached a low of 0.5944 in NY. While our ‘strong support’ level has not been breached yet, the buildup in upward momentum has fizzled out. Not only that, but downward momentum is also building. From here, as long as NZD stays below 0.6010 in the next few days, NZD is likely to weaken. That said, any decline is likely to face strong support at 0.5880. This support level is followed closely by another strong support at 0.5860 (the low in Sep).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.