NZD/USD: Outlook for NZD is no longer positive – UOB Group

New Zealand Dollar (NZD) could test the support at 0.5910 before stabilising; the major support at 0.5880 is unlikely to come into view. In the longer run, outlook for NZD is no longer positive, but neutral; it is likely to trade in a range between 0.5880 and 0.5980, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD/USD likely to trade in a range between 0.5880 and 0.5980

24-HOUR VIEW: "While we held the view yesterday that NZD 'could test 0.6010,' we highlighted that 'it is unlikely to be able to break clearly above this level.' We were also of the view that 'the next resistance at 0.6040 is unlikely to come under threat.' While NZD subsequently rose and reached a high of 0.6007, it dropped sharply from the high and continued to decline in the early Asian session today. The decline could test the support at 0.5910 before stabilising. The major support at 0.5880 is unlikely to come into view. On the upside, resistance levels are at 0.5950 and 0.5965."

1-3 WEEKS VIEW: "We turned positive on NZD early last week. Last Friday (12 Sep, spot at 0.5970), we highlighted that NZD 'could break above 0.5990, but the scope for further advance may be limited.' After NZD broke above 0.5990, we indicated yesterday (17 Sep, spot at 0.5985) that 'there has been no significant increase in upward momentum.' However, we stated that 'there is a chance for NZD to rise to 0.6010.' We also stated that 'the likelihood of NZD reaching 0.6040 is not high for now.' NZD then rose to a high of 0.6007 and then fell sharply. Today, NZD dropped below our ‘strong support’ level of 0.5940. The breach of our ‘strong support’ level indicates that the outlook for NZD is no longer positive, but neutral. For the time being, we expect NZD to trade in a range between 0.5880 and 0.5980."