The New Zealand Dollar (NZD) is expected to continue weakening; Given the extreme oversold conditions, it remains to be seen if 0.5815 will come into play. Long term, the outlook for the NZD remains negative; the technical target is now last year’s low of 0.5775, note UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.
NZD expected to continue weakening
24 HOUR VIEW: “After the NZD fell past our expectations two days ago, we indicated yesterday that ‘Weakness is likely to continue today, but oversold conditions suggest any decline may fall short of major support at 0.5850.’ ‘ Anticipated weakness once again exceeded our expectations as the NZD fell to a low of 0.5840. Although we still expect the NZD to weaken today, given the extremely oversold conditions, it remains to be seen if the next support at 0.5815 will come into play. “To maintain momentum, the NZD must remain below 0.5885, with minor resistance at 0.5865.”
1-3 WEEK VIEW: “When we revised our NZD outlook from neutral to negative two days ago (Nov 13, spot at 0.5925), we indicated that ‘it is too early to say whether major support at 0.5850 is within reach.’ Following the NZD drop, we highlighted yesterday (Nov 14, spot at 0.5885) that ‘The increase in momentum indicates that the probability of the NZD falling to 0.5850 has also increased.’ In NY trading, the NZD fell to 0.5840. Our negative outlook for the NZD remains unchanged; the technical target is now last year’s low of 0.5775. To maintain momentum, the NZD must remain below the ‘resistance. strong’ at 0.5925 (the level was at 0.5955 yesterday).”
Source: Fx Street
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