NZD/USD: Unlikely to reach the major support at 0.5950 - UOB Group

Slight increase in momentum indicates New Zealand Dollar (NZD) is likely to edge lower against US Dollar (USD); any decline is unlikely to reach the major support at 0.5950. In the longer run, price action indicates that further NZD weakness is likely; the level to watch is 0.5950, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Further NZD weakness is likely

24-HOUR VIEW: "NZD fell to a low of 0.5990 two days ago before rebounding. Yesterday, when it was at 0.6015, we indicated that 'the rebound from oversold conditions suggests that instead of declining, NZD is more likely to consolidate today, probably in a range of 0.5990/0.6030.' NZD subsequently traded between 0.5980 and 0.6035, a range wider than expected. NZD closed largely unchanged at 0.5998 (-0.07%). There has been a slight increase in downward momentum, and NZD is likely to edge lower today. However, any decline is unlikely to reach the major support at 0.5950. The low of 0.5980 from yesterday is expected to provide support as well. On the upside, resistance levels are at 0.6015 and 0.6030."

1-3 WEEKS VIEW: "Our update from yesterday (08 July, spot at 0.6015) remains valid. As highlighted, the price action from earlier this week 'indicates that further NZD weakness is likely, and the level to watch is 0.5950.' We will maintain our negative NZD view as long as 0.6060 (no change in 'strong resistance' level) is not breached."