24-hour view: We expected NZD to consolidate and trade between 0.6330 and 0.6400 yesterday. However, NZD dipped briefly to 0.6309 before closing on a soft note at 0.6326 (-0.68%). The underlying tone has softened, but while NZD is likely to edge lower today, it is unlikely to threaten the strong support at 0.6285. On the upside, if NZD breaks above 0.6355 (minor resistance is at 0.6340), it would suggest the current mild downward pressure has faded. 

Next 1-3 weeks: Last Thursday (13 Jul), when NZD was trading at 0.6300, we highlighted that “the risk for NZD has shifted to the upside towards 0.6385.” After NZD soared, we highlighted on Friday (14 Jul, spot at 0.6385) that “the risk for NZD remains on the upside and the levels to watch are 0.6445 and 0.6495.” NZD has not been able to build on its momentum. as it pulled back from a high of 0.6412. The pullback has diminished the likelihood of NZD rising to 0.6445 and 0.6495. However, only a breach of 0.6285 (no change in ‘strong support’ level) would suggest that the current upward pressure has fizzled out.