In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, NZD/USD still faces a probable drop to the mid-0.6000s in the next few weeks.

Key Quotes

24-hour view: “Yesterday, we expected NZD to ‘trade between 0.6100 and 0.6155’. We did not expect the spike in volatility as NZD plunged to 0.6081, snapped up to a high of 0.6171 before dropping back down. The whippy price actions have resulted in a mixed outlook. Further choppy price actions are not ruled out, likely between 0.6080 and 0.6160.”

Next 1-3 weeks: “There is not much to add to our update from Tuesday (12 Jul, spot at 0.6115). As highlighted, the weak phase in NZD from late Jun is still intact and NZD could weaken further to 0.6050. That said, after the strong bounce from 0.6080 yesterday, the odds for NZD to decline to 0.6050 have diminished somewhat. Overall, only a break of 0.6190 (no change in ‘strong resistance’ level from yesterday) would indicate that the weak phase has run its course.”