In the view of UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, extra downside in NZD/USD is likely to meet a tough
In the view of UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia, extra downside in24-hour view: Yesterday, we expected NZD to consolidate. Our expectation was incorrect as it plunged to a low of 0.5944 before ending the day on a weak note at 0.5948 . Unsurprisingly, the rapid drop is oversold, but with no signs of stabilisation just yet, NZD is likely to weaken further. However, any decline is unlikely to reach 0.5880 today . Resistance is at 0.
Next 1-3 weeks: After NZD soared to a high of 0.6044 last Friday , we highlighted that “the improving upward momentum suggests NZD could test and potentially break above the resistance at 0.6050.” We added, “a breach of 0.5930 would suggest that NZD is not ready to test 0.6050.” NZD then fell sharply and reached a low of 0.5944 in NY. While our ‘strong support’ level has not been breached yet, the buildup in upward momentum has fizzled out. Not only that, but downward momentum is also building.
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The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.EUR/USD is sitting at YTD lows near 1.0450 in the European morning on Tuesday. Hawkish Fed expectations and risk-aversion are supporting the US Dollar uptrend, weighing on the pair. US JOLTS Job Openings data is next in focus amid a light EU economic calendar. GBP/USD remains on the defensive near a multi-month trough touched this Tuesday.
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