A further decline could motivate NZD/USD to revisit the 0.6045 region in the near future, according to economist Lee Sue Ann and marketing strategist Que Ser Leang of UOB Group.
24-hour view: “Yesterday we were of the view that NZD ‘may decline further but is unlikely to break the key support at 0.6135’. While the NZD weakened as expected, it broke through 0.6135 and fell sharply to 0.6094. Impulsive momentum suggests it could break below the yearly low of 0.6085. Heavily oversold conditions suggest that NZD may not be able to maintain support below this level and is unlikely to threaten further support at 0.6045. Resistance is 0.6125, followed by 0.6145.
Next 1-3 Weeks: “Yesterday (May 24, spot at 0.6185) we indicated that “A rapid build-up in downward momentum is likely to lead to further weakness in the NZD. but worth noting 0.6135 is a fairly strong support level”. We are surprised at how easily NZD took off 0.6135 as it plunged to close a whopping 2.22% lower (0.6109), its biggest 1-day drop in over three months. NZD is likely to weaken further. A break below the yearly low of 0.6085 will shift the focus to 0.6045. Downside risk is intact as long as NZD remains below 0.6185 (the “strong resistance” level was at 0.6270 yesterday).