NZD/USD: Weakness in NZD has stabilised - UOB Group

New Zealand Dollar (NZD) could test 0.5695 vs US Dollar (USD) before the risk of a pullback increases. In the longer run, weakness in NZD has stabilised; it is likely to consolidate between 0.5540 and 0.5760 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD is likely to consolidate between 0.5540 and 0.5760 for now

24-HOUR VIEW: "While we expected NZD to decline yesterday, we stated that 'it is unclear whether there is enough momentum for NZD to break the major support at 0.5450.' Our view was incorrect as after dipping to a low of 0.5485, NZD rebounded. During the NY session, it lifted off and surged to 0.5668, closing sharply higher by 2.07%at 0.5650. Today, provided that NZD holds above 0.5580 (minor support at 0.5620), it could test 0.5695 before the risk of a pullback increases. The major resistance at 0.5760 is not expected to come under threat."

1-3 WEEKS VIEW: "The following are the excerpts from our update two days ago (08 Apr, spot at 0.5545): 'Although it is too early to expect the weakness to stabilise, it remains to be seen how much more can NZD decline. The next support is at 0.5450.' Yesterday, NZD dropped to 0.5485 and then surged, breaking above our 'strong resistance' level at 0.5650. The breach of the 'strong resistance' suggests that the weakness in NZD has stabilised. NZD has likely entered a consolidation phase, and it is likely to trade between 0.5540 and 0.5760 for now."