NZD/USD: Likely to consolidate in a range of 0.5935/0.5975 – UOB Group
New Zealand Dollar (NZD) is likely to consolidate in a range of 0.5935/0.5975 against US Dollar (USD). In the longer run, NZD could continue to weaken, but it may consolidate first before heading lower toward 0.5920, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
NZD may continue to weaken
24-HOUR VIEW: "When NZD was at 0.5975 in the early Asian session yesterday, we pointed out that 'downward momentum is increasing, and NZD could test the support at 0.5950.' However, we indicated that 'a sustained break below 0.5950 appears unlikely.' The expected decline exceeded our expectation as NZD dropped to a low of 0.5939 before rebounding. The rebound in oversold conditions suggests that instead of continuing to weaken, NZD is more likely to consolidate today, probably in a range of 0.5935/0.5975."
1-3 WEEKS VIEW: "We have held the same view since early last week (08 Jul, spot at 0.6015), in which we stated that 'the price action indicates that further NZD weakness is likely, and the level to watch is 0.5950.' Yesterday, NZD finally breached 0.5950, as it dropped to a low of 0.5939. While we continue to expect NZD to weaken, it may consolidate first before heading toward 0.5920. We will maintain our negative NZD view as long as it holds below 0.6005 (‘strong resistance’ level previously at 0.6030)."
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FXStreet Insights Team
FXStreet
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