Further downside could now see NZD/USD recede to the 0.6060 region in the near term, note FX Strategists at UOB Group Quek Ser Leang and Lee Sue Ann.

Key Quotes

24-hour view: “We expected NZD to weaken yesterday but we were of view that ‘0.6060 is likely out of reach’. NZD subsequently dropped to 0.6103 before staging a surprisingly sharp rebound (high of 0.6167). The rebound appears to be running ahead of itself and NZD is unlikely to strengthen much further. For today, NZD is more likely to trade sideways between 0.6125 and 0.6175.”

Next 1-3 weeks: “We highlighted yesterday that downward momentum has improved and NZD could weaken towards 0.6060. NZD subsequently dropped to 0.6103 before rebounding sharply. Downward momentum has eased somewhat but only a break of 0.6185 (no change in ‘strong resistance’ level from yesterday) would indicate that downward momentum has dissipated.”