NZD/USD could debilitate further and slip back to the 0.5900 region in the next weeks, note FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Our view for NZD to ‘trade sideways between 0.5960 and 0.6015’ was incorrect as it dropped to a low of 0.5929 before rebounding. Despite the decline, downward momentum has not improved by much and NZD is unlikely to weaken further. For today, NZD is more likely to trade sideways within a range of 0.5935/0.5990.”

Next 1-3 weeks: “We have expected NZD to weaken since the middle of last Wednesday (14 Sep, spot at 0.6005). In our latest narrative from last Friday (16 Sep, spot at 0.5965), we highlighted that NZD is likely to weaken further, possibly to 0.5900. Yesterday (19 Sep), NZD dropped to a low of 0.5929. While downward momentum has not improved by much, there is room for NZD to weaken further to 0.5900. Only a breach of 0.6020 (‘strong resistance’ level was at 0.6035 yesterday) would indicate that the weakness in NZD has stabilized.”