NZD/USD risks a deeper correction – UOB

UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang expect NZD/USD to accelerate its decline on a close below the 0.6100 mark.

Key Quotes

24-hour view:Yesterday, we expected NZD to consolidate between 0.6135 and 0.6180. However, NZD traded in a higher range of 0.6159/0.6200 before ending the day little changed at 0.6163 (-0.02%). The underlying tone has softened somewhat, and today, NZD is likely to edge lower. In view of the mild downward pressure, any decline is unlikely to threaten the major support at 0.6100 (minor support is at 0.6120). Resistance is at 0.6175, followed by 0.6195.

Next 1-3 weeks: Our update from Monday (26 Jun, spot at 0.6150) still stands. As highlighted, downward momentum has improved a tad, but NZD has to break clearly below 0.6100 before a sustained decline is likely. The likelihood of NZD breaking below 0.6100 will remain intact as long as NZD stays below 0.6210 (no change in ‘strong resistance’ level).