Extra decline in NZD/USD could revisit the 0.6050 area in the next weeks, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, NZD dropped sharply to 0.6098 during London hours before trading sideways. Downward momentum remains strong and the weakness in NZD could extend to 0.6080 first before stabilization is likely. The next support at 0.6050 is unlikely to come under threat. Resistance is at 0.6135 followed by 0.6160.”

Next 1-3 weeks: “We have held a negative NZD view since late last month. In our latest narrative from last Friday (08 Jul, spot at 0.6180), we indicated that downward momentum has waned and the odds for NZD to weaken to 0.6100 have diminished. We did not quite expect the sharp drop yesterday (11 Jul) as NZD plummeted to a low of 0.6098. The price actions suggest the weak phase is still intact and NZD could weaken further to 0.6050. On the upside, a break of 0.6190 (‘strong resistance’ level previously at 0.6230) would indicate that NZD is unlikely to weaken further.”