The oversold decline could extend to 0.5985 before stabilization can be expected. In the long term, the potential for further declines could be limited; The levels to watch are 0.5985 and 0.5970, according to UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.
The levels to watch are 0.5985 and 0.5970
24 HOUR VIEW: “Our view that the NZD would trade in a range yesterday was wrong. Instead of trading in a range, it fell sharply to 0.5993. Although oversold, the drop could extend to 0.5985 before it can be expected a stabilization. Today, a sustained break below this level seems unlikely. Resistance is at 0.6020; a break of 0.6040 would mean that NZD weakness has stabilized.”
1-3 WEEK VIEW: “On Tuesday (Oct 22, pair at 0.6030), we indicated that ‘recent price action indicates 0.6005 is within reach.’ We added, ‘Looking forward, the next level to watch below 0.6005 is 0.5985.’ Yesterday, the NZD fell below 0.6005, reaching a low of 0.5993. Although we continue to expect the NZD to fall, the weakness that began earlier this month appears to be overextended, both in time and price. Further declines could be limited. Levels to watch are 0.5985 and 0.5970. If the NZD breaks above 0.6060 (‘strong resistance’ level previously at 0.6085), it would mean that the NZD is not falling further.”
Source: Fx Street
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