24-hour view: Our view for NZD to trade in range between 0.5820 and 0.5865 was incorrect. NZD dropped sharply to 0.5801 in late NY trade and extended its decline in Asian trade today. Further NZD weakness appears likely, even though it does not appear to have enough momentum to reach the major support at 0.5730 today (there is another support at 0.5760). In order to maintain the momentum, NZD must not break above 0.5830 (minor resistance is at 0.5810). 

Next 1-3 weeks: Our latest narrative was from two days ago (24 Oct, spot at 0.5845), when we highlighted that “there is room for NZD to weaken further, even though any decline is expected to face strong support at 0.5800.” NZD fell to a low of 0.5801 in NY before extending its decline today. The surge in momentum suggests NZD could continue to decline to 0.5730. On the upside, if NZD breaks above 0.5855 (‘strong resistance’ level previously at 0.5895), it would mean that the weakness in NZD has stabilised.