Further selling pressure could motivate NZD/USD to challenge the solid support at the 0.6100 region in the next few weeks, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We expected NZD to weaken further yesterday but we noted, ‘oversold conditions suggest the major support at 0.6100 is unlikely to come under threat today’. We added, ‘There is another support at 0.6135’. NZD dropped to a low of 0.6132 before rebounding. The rebound amid oversold conditions suggests NZD has likely moved into a consolidation phase. In other words, NZD is likely to trade sideways today, expected to be between 0.6135 and 0.6195.”

Next 1-3 weeks: “Our update from yesterday (27 Feb, spot at 0.6165) still stands. As highlighted, while NZD is still weak, it remains to be seen if NZD has enough momentum to break below the next major support at 0.6100. All in all, only a breach of the ‘strong resistance’ at 0.6225 (no change in level) would indicate that the NZD weakness that started in the middle of the month has come to an end.”