NZD/USD: Next support below 0.6005 is at 0.5980 – UOB Group

FXStreet Insights Team FXStreet

There is still room for the New Zealand Dollar (NZD) to drop below 0.6000, UOB Group FX strategists Quek Ser Leang and Peter Chia note.

Set to drop towards 0.5980

24-HOUR VIEW: “Last Friday, when NZD was trading at 0.6045, we held the view that NZD ‘is likely to decline.’ We highlighted that ‘support levels are at 0.6030 and 0.6005.’ We also highlighted that ‘0.6005 is likely out of reach for now.’ Our view of NZD declining was correct. However, it dropped more than expected, almost reaching 0.6005 (low has been 0.6006). The rebound in early Asian trading today indicates slowing momentum. This, combined with oversold conditions, suggests that instead of continuing to weaken, NZD is more likely to trade in a sideways range of 0.6010/0.6045.”

1-3 WEEKS VIEW: “We highlighted last Wednesday (17 Jul, spot at 0.6070) ‘downward momentum is building, but not sufficiently enough to suggest the start of a sustained decline.’ After NZD dropped, we highlighted on Friday (19 Jul, spot at 0.6045) that ‘downward momentum has increased further, and the chance of NZD breaking below 0.6030 has also increased.’ We added, ‘the next level to watch below 0.6030 is 0.6005.’ NZD subsequently fell to a low of 0.6006. From here, oversold short-term conditions could lead to a couple of days of sideways trading. As long as 0.6070 (‘strong resistance’ level previously at 0.6085) is not breached, there is room for NZD to drop to and possibly below 0.6005. Looking ahead, the next support below 0.6005 is at 0.5980.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD back to 1.3250, down modestly for the day

GBP/USD now comes under fresh downside pressure and recedes toward the mid-1.3200s on Tuesday, partially reversing the optimism seen at the beginning of the week. Meanwhile, Cable’s bearish tone follows the resumption of the upside traction in the Greenback, always amid the sharp rally in USD/JPY.

EUR/USD off tops, back to 1.1400

EUR/USD now loses some momentum and recedes from the area of recent daily tops, revisiting the 1.1400 neighbourhood in the latter part of Tuesday session. The pair’s daily decline comes in response to the resurgence of some buying interest in the US Dollar.

Gold clings to daily gains beyond $4,000

Following multi-month lows near $3,950, Gold now manages to regain some composure and reclaim the area beyond the key $4,000 yardstick per troy ounce on Wednesday. Still, any meaningful recovery appears limited as a broadly firmer US Dollar and rising US Treasury yields weigh on the yellow metal.

Ripple defends critical support, Stellar extends recovery

Ripple (XRP) trades around the key $1.00 psychological level, consolidating as the token awaits its next directional catalyst. Stellar (XLM) extends its recovery above $0.178 after posting modest gains at the start of this week.

Why a hawkish Bank of Japan could trigger the next Bitcoin sell-off

The Japanese Yen hits a 40-year low of 162.00 against the US Dollar, raising concerns about intervention or additional rate hikes by the Bank of Japan. BoJ may sell US Treasuries to buy back Yen, potentially pushing US bond yields higher and making Bitcoin less attractive to investors.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.