In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, a break above 0.6145 should mitigate the selling pressure around NZD/USD in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the current movement is part of a consolidation phase’ and we expected NZD to ‘trade sideways between 0.6065 and 0.6130’. Our view for sideway-trading was not wrong even though NZD traded within a narrower range than expected (0.6079/0.6102). Further consolidation would not be surprising, likely within a range of 0.6080/0.6140.”

Next 1-3 weeks: “Our latest narrative was from last Friday (02 Sep, spot at 0.6090) where further NZD weakness is likely and the next support is at 0.6030. NZD subsequently dropped to 0.6051 but has not been able to make further headway on the downside. Downward momentum is beginning to wane and a break of 0.6145 (no change in ‘strong resistance’ level from yesterday) would indicate that NZD is unlikely to head lower to 0.6030.”