NZD/USD may test 0.5670 next – OCBC

New Zealand Dollar (NZD) remains under mild downward pressure and could test 0.5670 next, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward bias remains intact

24-HOUR VIEW: "While we expected NZD to “continue to edge lower,” yesterday, we held the view that it “is unlikely to be able to break below 0.5700.” However, NZD managed to break 0.5700, dropping to a low of 0.5694 before recovering slightly to close at 0.5708 (-0.26%). The downward bias remains intact, but based on the current momentum, NZD is unlikely to threaten the major support at 0.5670 today. Note that there is another support level at 0.5685. Resistance levels are at 0.5715 and 0.5725."

1-3 WEEKS VIEW: "Last Friday (31 Oct, spot at 0.5740), we highlighted that “there has been a slight increase in downward momentum. We expected NZD to “edge lower, potentially testing 0.5700.” While NZD broke below 0.5700 and dropped to a low of 0.5694 yesterday, there is no significant increase in downward momentum. That said, there is scope for NZD to test 0.5670 next. Overall, only a breach of 0.5750 (‘strong resistance’ level previously at 0.5765) would indicate that the mild downward pressure has eased."