Likely to trade in a 0.5940/0.6040 range for now – UOB Group

The New Zealand Dollar (NZD) could trade in a choppy manner between 0.5965 and 0.6015. In the longer run, weakness in NZD from early last month has ended; it is likely to trade in a 0.5940/0.6040 range for now, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

Weakness in NZD from early last month ends

24-HOUR VIEW: “Last Friday, we expected NZD to trade in a range between 0.5950 and 0.5990. NZD then traded in a 0.5960/0.5999 range. It closed at 0.5962 but rose above 0.6000 in early Sydney trade today. The volatile price action has resulted in a mixed outlook. Today, NZD could continue to trade in a choppy manner, probably between 0.5965 and 0.6015.”

1-3 WEEKS VIEW: “We turned negative in NZD early last month. As we tracked the decline, in our most recent narrative from last Wednesday (30 Oct, spot at 0.5970), we indicated that ‘There is still no clear increase in downward momentum and the chance of a sustained break below 0.5950 is not high.’ While NZD subsequently dropped below 0.5950, it rebounded quickly from 0.5940. In early Sydney trade today, it rose to 0.6010. Although our ‘strong resistance’ at 0.6010 has not been clearly breached, downward momentum appears to have faded. In other words, the weakness in NZD has ended. NZD has likely entered a range trading phase and is expected to trade between 0.5940 and 0.6040 for now.”