NZD/USD risks a potential move to 0.58 – UOB

FX Strategists at UOB Group noted NZD/USD could slip back to the 0.5800 area in the short-term horizon.

Key Quotes

24-hour view: “NZD dropped below the bottom of our expected 0.5950/0.6160 range as it hit an overnight low of 0.5919. Despite the relatively rapid decline, downward momentum has not improved by as much. That said, there is room for NZD to move 0.5900 but 0.5860 is not likely to come into the picture. Resistance is at 0.5990 followed by 0.6030.”

Next 1-3 week: “We updated last Friday (13 Mar, spot at 0.6115) the ‘odds for a break of 0.6000 have increased considerably’. While NZD did not break this level on Friday (low of 0.6018), it crashed below this level and hit 0.5929 this morning (after emergency rate cut by RBNZ). From here, the focus has shifted to 0.5800. That said, this level may not come into the picture so soon. ‘Strong resistance’ has moved lower to 0.6300. Only an unlikely move above this level would indicate the current weakness has stabilized.”