NZD/USD: Major support at 0.6005 is likely out of reach – UOB Group

The New Zealand Dollar (NZD) is likely to decline further; the major support at 0.6005 is likely out of reach (there is another support at 0.6030). In the longer run, NZD is likely to decline further; the level to watch is 0.6005, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

NZD is likely to decline further

24-HOUR VIEW: “Yesterday, we expected NZD to consolidate in a range of 0.6070/0.6110. NZD then traded between 0.6074 and 0.6105, closing at 0.6083 (-0.23%). In early Asian trade today, NZD plummeted, and given the sharp increase in momentum, it is likely to decline further. That said, the major support at 0.6005 is likely out of reach (there is another support at 0.6030). Resistance levels are at 0.6080 and 0.6095.”

1-3 WEEKS VIEW: “We turned negative in NZD two weeks ago. As we tracked the subsequent decline, in our most recent narrative from last Thursday (10 Oct, spot at 0.6070), we highlighted, while the oversold weakness has not stabilised, NZD ‘must break and remain below 0.6050 before further sustained decline is likely.’ We added, ‘the probability of NZD breaking clearly below 0.6050 will remain intact as long as 0.6145 (‘strong resistance’ level) is not breached.’ At the time of writing in early Asian session today, NZD fell sharply. While the 0.6050 has not been clearly breached yet, the sharp increase in short-term momentum suggests NZD is likely to decline further. The level to watch is at 0.6005. On the upside, the ‘strong resistance’ level has moved lower to 0.6115 from 0.6145.”