Further downside pressure could drag NZD/USD to the 0.6245 region in the next weeks, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected NZD to weaken yesterday but we were of the view that ‘a clear break of 0.6360 is unlikely’. The sharp sell-off came as a surprise as NZD plunged to 0.6320 before extending its decline during early Asian hours. The risk is still on the downside and NZD could weaken to 0.6275. The next support at 0.6240 could be out of reach for now. Resistance is at 0.6330 followed by 0.6360.”

Next 1-3 weeks: “Last Friday (06 May, spot at 0.6430), we highlighted NZD is likely to weaken but any decline is expected to face solid support at 0.6360. While our view for a weaker NZD was correct, the anticipated support did not materialize as NZD plunged to a low of 0.6320 yesterday. In view of the strong downward momentum, NZD could weaken further to 0.6245. The downside risk is intact as long as the ‘strong resistance’ at 0.6400 is not breached (level was at 0.6480 yesterday).”