Unlikely to break clearly below 0.6005 – UOB Group

Potential for the New Zealand Dollar (NZD) to continue to decline; given the oversold conditions, it is unlikely to break clearly below 0.6005. In the longer run, price action indicates that 0.6005 is likely within reach; the next level to watch below 0.6005 is 0.5985, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Next level to watch below 0.6005 is 0.5985

24-HOUR VIEW: “We did not expect the sharp drop in NZD that reached a low of 0.6027 (we were expecting range trading). Although the sharp drop appears to be overdone, there is potential for NZD to continue to decline. Given the oversold conditions, NZD is unlikely to break clearly below the major support at 0.6005. On the upside, any intraday rebound is expected to face strong resistance at 0.6060 with minor resistance at 0.6045.”

1-3 WEEKS VIEW: “Yesterday (21 Oct, spot at 0.6075), we highlighted that “momentum is beginning to slow, and the likelihood of NZD decline further to 0.6005 has decreased. We did not expect the subsequent sharp drop to 0.6027. The price action indicates that 0.6005 is likely within reach. The next level to watch below 0.6005 is 0.5985. On the upside, the ‘strong resistance’ level has moved lower to 0.6085 from 0.6115. A breach of the 0.6085 would mean that the weakness in NZD that started early this month has stabilised.”