NZD/USD: Likely to stay within the range of 0.5914/0.5969 – UOB Group
New Zealand Dollar (NZD) could remain volatile against US Dollar (USD), but it is likely to stay within yesterday’s range of 0.5914/0.5969. In the longer run, NZD weakness is intact, but it remains to be seen if it has enough momentum to reach June’s low, near 0.5885, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
NZD weakness is intact
24-HOUR VIEW: "Two days ago, we expected NZD to test the support at 0.5950. After NZD subsequently dropped to a low of 0.5939 and rebounded, we stated yesterday that 'the rebound in oversold conditions suggests that instead of continuing to weaken, NZD is more likely to consolidate in a range of 0.5935/0.5975.' Our view of consolidation turned out to be incorrect, as NZD dropped to a low of 0.5914, spiked to 0.5969 before dropping back down to close largely unchanged (0.5946, +0.02%). The choppy price action has resulted in a mixed outlook. Today, NZD could remain volatile, but it is likely to remain within yesterday’s range of 0.5914/0.5969."
1-3 WEEKS VIEW: "Yesterday (16 Jul, spot at 0.5955), we highlighted that 'while we continue to expect NZD to weaken, it may consolidate first before heading toward 0.5920.' We did not expect NZD to reach 0.5920 so soon, as it briefly dropped to a low of 0.5914. The weakness from early last week is intact, but it remains to be seen if NZD has enough momentum to reach June’s low, near 0.5885. Overall, only a breach of 0.5980 (‘strong resistance’ level previously at 0.6005) would indicate that NZD is not weakening further."
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FXStreet Insights Team
FXStreet
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