NZD/USD could drop to 0.6060 once 0.6100 is cleared in the near term, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Our expectations for NZD to test 0.6100 did not materialize as it dropped to 0.6115 before settling at 0.6120 (-0.14%). Downward momentum is beginning to build and but for today, any decline is likely limited to a test of 0.6080. Resistance is at 0.6125 followed by 0.6145.”

Next 1-3 weeks: “We highlighted on yesterday (31 Aug, spot at 0.6135) that downward momentum has eased and NZD is likely to trade between 0.6100 and 0.6200 for now. We added, NZD has to close below 0.6100 before a sustained decline is likely. That said, shorter-term downward momentum has improved and the chance for NZD to close below 0.6100 is on the high side. Overall, only a breach of 0.6165 would indicate that the risk of a sustained decline in NZD has dissipated. Looking ahead, the next support is at 0.6060.”