The New Zealand Dollar (NZD) is more likely to trade within the range of 0.5825 and 0.5890 rather than continue its upward trend, according to UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann. In the longer term, the probability of the NZD dropping to 0.5770 has decreased.
Diminished Likelihood of NZD Dropping to 0.5770
24 – HOUR VIEW: “After the NZD plunged to 0.5824 last Friday, we mentioned yesterday that ‘there is room for the NZD to keep weakening.’ However, we also noted that ‘given the oversold conditions, any decline is not likely to reach last month’s low, near 0.5795 (there’s another support at 0.5810).’ The NZD then fell to 0.5805 before making a surprisingly sharp upward move to 0.5888. This rapid ascent seems excessive, and instead of rising further, the NZD is more apt to trade between 0.5825 and 0.5890 today.”
1 – 3 WEEKS VIEW: “Yesterday (09 Dec), when the NZD was at 0.5835, we stated that it ‘is likely to trade with a downward bias toward 0.5795.’ We also pointed out that ‘the likelihood of it reaching 0.5770 is not high for now.’ The NZD later dropped to 0.5805 before bouncing back strongly to 0.5888. Although our’strong resistance’ at 0.5890 has not been surpassed yet, the decelerating momentum indicates that the likelihood of the NZD falling to 0.5770 has lessened.”
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