The New Zealand Dollar (NZD) is likely to trade in a range between 0.6030 and 0.6090. Buildup in downward momentum is not sufficiently enough to suggest a sustained decline; NZD has to break clearly below 0.6030 before further weakness can be expected, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

NZD needs to break above 0.6115 to continue upwards

24-HOUR VIEW: “Yesterday, we noted ‘the underlying tone has softened.’ We were of the view that NZD ‘is likely to edge lower but is unlikely to break below 0.6045.’ However, NZD fell more than expected to 0.6037. In early Sydney trade, NZD dipped to 0.6033 before rebounding sharply. The rebound in oversold conditions suggests NZD is unlikely to weaken much further. Today, NZD is more likely to trade in a range between 0.6030 and 0.6090.”

1-3 WEEKS VIEW: “In our latest narrative from last Friday (12 Jul, spot at 0.6090), we indicated that ‘the current price movements are likely part of a range trading phase, probably between 0.6045 and 0.6155.’ Yesterday, NZD fell sharply and broke below 0.6045 before closing at 0.6050 (- 0.40%). Downward momentum is building, but not sufficiently enough to suggest the start of a sustained decline. NZD has to break and stay below 0.6030 before further weakness can be expected. The likelihood of NZD breaking clearly below 0.6030 is not high for now, but it will remain intact as long as 0.6115 is not breached.”