In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, NZD/USD could accelerate losses on a close below 0.6200.

Key Quotes

24-hour view: “Yesterday, we indicated that ‘rapid build-up in downward momentum is likely to lead to further NZD weakness but expect solid support at 0.6200’. Our view was not wrong as NZD dropped to 0.6207 before rebounding slightly. While downward momentum has waned somewhat, NZD could dip below 0.6200. The next support at 0.6170 is unlikely to come under threat. Resistance is at 0.6240 but only a break of 0.6260 would indicate that the current downward pressure has eased.”

Next 1-3 weeks: “We turned negative NZD yesterday (29 Jun, spot at 0.6240) and expected NZD to trade with a downward bias towards 0.6200. NZD subsequently dropped to 0.6207. While downward momentum has not improved by much, NZD could drop below 0.6200. That said, NZD has to close below this solid support before further sustained decline is likely. The next support is at 0.6170. The downside risk is intact as long as NZD does not move above 0.6280 (‘strong resistance’ level was at 0.6300 yesterday).”