Likely to edge lower toward 0.5715 – UOB Group

New Zealand Dollar (NZD) could continue to decline; it does not appear to have sufficient momentum to reach 0.5715. In the longer run, downward momentum has increased slightly, and NZD could edge lower toward 0.5715, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Downward momentum has increased slightly

24-HOUR VIEW: “The following are excerpts from our update yesterday: ‘The softer underlying tone suggests NZD could drift lower toward 0.5760 today. The major support at 0.5740 is not expected to come into view’. The anticipated weakness exceeded our expectations as NZD dropped to a low of 0.5738. While increasing downward momentum suggests NZD could continue to decline, it does not appear to have sufficient momentum to reach 0.5715 (there is another support level at 0.5735). Resistance is at 0.5765; a breach of 0.5775 would indicate that NZD is not declining further.”

1-3 WEEKS VIEW: “On Wednesday (07 Jan, spot at 0.5780), we highlighted that NZD ‘is likely to trade in a range, probably between 0.5740 and 0.5825’. Yesterday, NZD dipped below 0.5740, reaching a low of 0.5738. Downward momentum has increased slightly, and from here, we expect NZD to edge lower toward 0.5715. The mild downward pressure would remain intact as long as the ‘strong resistance’ level, now at 0.5785, is not breached.”