Unlikely to challenge the major support at 0.6200 – UOB Group

The New Zealand Dollar (NZD) could continue to decline, but it is unlikely to challenge the major support at 0.6200. In the longer run, outlook for NZD is neutral; it is likely to trade between 0.6200 and 0.6340, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

Likely to trade between 0.6200 and 0.6340

24-HOUR VIEW: “Our view for ‘further NZD strength’ yesterday was incorrect, as it plunged from 0.6356 to 0.6261. The sharp decline has gathered some momentum, and NZD could continue to decline today. However, given that conditions are already oversold, NZD is unlikely to challenge the major support at 0.6200 (minor support is at 0.6235). Resistance is at 0.6290, followed by 0.6315.”

1-3 WEEKS VIEW: “After NZD surged two days ago, we indicated yesterday (25 Sep, spot at 0.6350) that it ‘is expected to head higher, potentially to 0.6410.’ We did not anticipate the ensuing selloff that sent NZD plunging to 0.6261. The breach of our ‘strong support’ level at 0.6270 indicates that the buildup in momentum has faded. We hold a neutral NZD view for now, and we expect it to trade between 0.6200 and 0.6340.”