NZD/USD risks a deeper pullback – UOB

In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, NZD/USD could slip back to the 0.5800 region in the short-term horizon.

Key Quotes

24-hour view: NZD fell to a low of 0.5810 yesterday before rebounding to close higher by 0.5847 (+0.32%). The rebound in oversold conditions (and lacklustre downward momentum) suggests that NZD is unlikely to weaken further. Today, NZD is more likely to trade in a range, probably between 0.5830 and 0.5880. 

Next 1-3 weeks: Yesterday, NZD fell to a low of 0.5810, its lowest level since November last year. Despite the decline, downward momentum has not improved much. That said, there is room for NZD to weaken further, even though any decline is expected to face strong support at 0.5800. On the upside, if NZD breaks above 0.5895, it would mean that the weakness in NZD has stabilised.