New Zealand Dollar (NZD) is under mild downward pressure vs the US Dollar (USD); it could edge lower but is unlikely to break clearly below 0.5715. In the longer run, a breach of the strong support at 0.5715 would indicate that 0.5790 is out of reach, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
NZD/USD can edge lower
24-HOUR VIEW: “We expected NZD to ‘trade sideways between 0.5735 and 0.5770’ yesterday. NZD then rose to 0.5770, dropped to 0.5730, before closing at 0.5733 (-0.17%). Downward momentum has increased slightly. Today, NZD is likely to edge lower, but given the mild momentum, any decline is unlikely to break clearly below 0.5715. The mild downward pressure would remain intact provided that NZD remains below 0.5760 (minor resistance is at 0.5745).”
1-3 WEEKS VIEW: “NZD rose sharply last Thursday. In our update from last Friday (21 Feb, spot at 0.5760), we indicated, ‘the boost in upward momentum suggests the major resistance level is back in sight.’ Yesterday (Monday), NZD rose to 0.5770 but fell from the high. From here, a breach of 0.5715 (no change in ‘strong support’ level) would indicate that 0.5790 is out of reach.”
