NZD/USD: May edge lower and test 0.5985 - UOB Group

New Zealand Dollar (NZD) may edge lower and test 0.5985 against US Dollar (USD); a sustained break below this level is unlikely. 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.

Price action indicates that further NZD weakness is likely

24-HOUR VIEW: "We indicated last Friday that 'the outlook for NZD appears unclear,' and we expected it to 'trade in a range between 0.5995 and 0.6045.' NZD then traded in a range of 0.6002 and 0.6043. NZD closed on a soft note at 0.6009 (-0.45%). Today, NZD may edge lower and test the support at 0.5985. A sustained break below this level is unlikely. The major support at 0.5950 is also unlikely to come under threat. Resistance is at 0.6025; a breach of 0.6040 would indicate that the current mild downward pressure has eased."

1-3 WEEKS VIEW: "In our latest narrative from last Tuesday (08 Jul, spot at 0.6015), we indicated that 'the price action from earlier this week indicates that further NZD weakness is likely, and the level to watch is 0.5950.' Since then, NZD has not been able to make any significant headway on the downside. However, we will maintain our view as long as 0.6060 (no change in 'strong resistance' level) is not breached."