Instead of continuing to decline, NZD is more likely to trade sideways between 0.5965 and 0.6005. In the longer run, there is no significant increase in momentum, but the weakness in NZD has not stabilised. The next level to watch is 0.5950, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.

The next level to watch is 0.5950

24-HOUR VIEW: “When NZD was at 0.5985 yesterday, we indicated that ‘as long as 0.6010 is not breached, NZD could dip below 0.5970 before stabilisation is likely.’ We also indicated that ‘the next support at 0.5950 is unlikely to come into view.’ NZD then fell to 0.5958, rebounding to close largely unchanged at 0.5981 (+0.04%). The rebound in oversold conditions and slowing momentum suggest that instead of continuing to decline, NZD is more likely to trade sideways today, probably between 0.5965 and 0.6005.”

1-3 WEEKS VIEW: “Our update from yesterday (28 Oct, spot at 0.5985) still stands. As highlighted, while the recent price action did not result in a significant increase in momentum, the weakness in NZD has not stabilised. The next level to watch is 0.5950. On the upside, a breach of 0.6025 (‘strong resistance’ level previously at 0.6035) would mean that the weakness that started early this month has stabilised.”