NZD/USD is now expected to navigate within the 0.6300-0.6435 range in the next few weeks, note FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected NZD to ‘trade within a range of 0.6430/0.6475’ yesterday. We did not anticipate the sharp sell-off that sent NZD plunging by a whopping 1.46% (NY close of 0.6362). Not surprisingly, conditions are oversold but there is room for the weakness in NZD to extend to 0.6330 first before stabilization is likely. Resistance is at 0.6385 followed by 0.6405.”

Next 1-3 weeks: “The surprisingly sharp sell-off that took out our ‘strong support’ level at 0.6370 indicates that the NZD strength that started late last week (see annotations in the chart below) has ended. While shorter-term downward momentum has improved somewhat, the current movement is likely part of a consolidation phase. From here, NZD is likely to trade within a range of 0.6300/0.6435.”