The New Zealand Dollar (NZD) is likely to consolidate between 0.6050 and 0.6100. In the longer run, oversold weakness has not stabilised, but NZD must break clearly below 0.6050 before further sustained decline is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD must break below 0.6050 before a steady decline

24-HOUR VIEW: “Yesterday, we indicated that ‘tentative signs of slowing momentum combined with the still oversold conditions suggest NZD is likely to trade in a range.’ Our view of range trading was incorrect, as NZD plummeted to a low of 0.6053. The sharp and swift decline appears to be overdone. This, combined with tentative signs of slowing momentum, suggests NZD is unlikely to weaken much further. Today, NZD is more likely to consolidate between 0.6050 and 0.6100.”