New Zealand Dollar (NZD) could decline vs US Dollar (USD), but as there is no significant increase in momentum, it is unlikely to be able to break clearly below 0.5860. In the longer run, outlook is mixed; NZD is expected to trade in a 0.5835/0.6030 range, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
NZD/USD is unlikely to be able to break clearly below 0.5860
24-HOUR VIEW: “After NZD soared on Tuesday, we highlighted yesterday, Wednesday, that NZD ‘is likely to rise further.’ However, we pointed out that ‘conditions are deeply overbought, and NZD is unlikely to be able to break above 0.5965.’ Although NZD subsequently rose to 0.5969, it dropped sharply from the high, closing at 0.5898 (-0.63%). This time around, NZD is likely to decline further, but as there is no significant increase in downward momentum, it is unlikely to be able to break clearly below 0.5860. The major support at 0.5835 is not expected to come into view. On the upside, resistance levels are at 0.5915 and 0.5940.”
1-3 WEEKS VIEW: “Not much changed since our update yesterday (14 May, spot at 0.5935). As highlighted, ‘the recent price movements have resulted in a mixed outlook.’ For the time being, we expect NZD to trade in a 0.5835/0.6030 range.”