NZD/USD: Upside bias appears diminished – UOB

In the opinion of Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, the upside momentum in NZD/USD seems to have lost some impulse as of late.

Key Quotes

24-hour view: After NZD dropped to 0.5914 on Tuesday and then rebounded, we indicated yesterday that “the weakness in NZD appears to have stabilised.” We expected NZD to trade in a range between 0.5915 and 0.5970. However, NZD dipped to a low of 0.5907 before ending the day on a soft note at 0.5912 (-0.40%). There is no clear increase in downward momentum and NZD is unlikely to decline much further. Today, NZD is likely to trade sideways in a range of 0.5900/0.5940. 

Next 1-3 weeks: Our update from yesterday (08 Nov, spot at 0.5935) still stands. As highlighted, upward momentum has eased, but there is still a chance, albeit not a high one, for NZD to rise to 0.6055. Overall, only a clear break below 0.5900 (no change in ‘strong support’ level from yesterday) would indicate the NZD that started late last week has ended. Looking ahead, if NZD breaches 0.5900, it will then likely to trade in a range for a period of time.