NZD/USD: sustained break below 0.5950 is unlikely - UOB Group

New Zealand Dollar (NZD) could test 0.5950 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: "The following are excerpts from our update yesterday: '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.' NZD subsequently rose to a high of 0.6014, and then in a surprising move, dropped sharply to a low of 0.5969. Downward momentum is increasing, and today, NZD could test the support at 0.5950. This time around, a sustained break below 0.5950 appears unlikely. The next support at 0.5925 is also unlikely to come under threat. Resistance is at 0.5990, followed by 0.6010."

1-3 WEEKS VIEW: "Our most recent narrative was from one week ago (08 Jul, spot at 0.6015), wherein 'the price action indicates that further NZD weakness is likely, and the level to watch is 0.5950.' After range trading for several days, NZD dropped sharply to a low of 0.5969 yesterday. The price action continues to suggest NZD could weaken to 0.5950. However, the 'strong resistance' level is now at 0.6030 from 0.6060 previously."