New Zealand Dollar (NZD) has scope to test 0.5665; A clear break above this level is unlikely. In the long run, weakness in the NZD has stabilized; For now, it is likely to trade between 0.5605 and 0.5695, said UOB Group FX analysts Quek Ser Liang and Peter Chia.
Weakness in NZD has stabilized
24-hour view: “NZD fell to a low of 0.5607 last Friday and then reversed. Yesterday, we reported that ‘the rebound amid slow momentum and oversold conditions suggests that rather than a decline today, NZD is more likely to trade in a range, perhaps between 0.5610 and 0.5645’. NZD later recovered before the close. Traded within the range of 0.5620/0.5647 (+0.35%). That said, there is scope for NZD to test 0.5665, and we also do not expect the next resistance at 0.5695. Will be at 0.5630 and 0.5620.
1-3 week view: “Last Wednesday (November 05, spot at 0.5645), we highlighted that ‘downward pressure has increased, and NZD may weaken to 0.5600 next.’ Indicators are indicating downward momentum. “Unless NZD falls below 0.5600 within these one to two days, a breach of ‘strong resistance’ at 0.5660 (the level was previously at 0.5680) would mean that the weakness in NZD since the end of last month has been stabilised.” Nevertheless, the pace of decline has slowed down to a great extent. “As stated yesterday, the weakness in the NZD has stabilized, and for the time being, we expect it to trade in a range between 0.5605 and 0.5695.”
