The New Zealand Dollar, also known as NZD, is expected to consolidate within a range of 0.6070 to 0.6110. According to UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann, the currency has not yet stabilized its oversold weakness in the longer run. However, a clear break below 0.6050 is needed before a sustained decline is likely to occur.
In the 24-hour view, the NZD was observed trading between 0.6071 and 0.6102, which was narrower than the expected consolidation range of 0.6065 to 0.6115. The lack of increase in either downward or upward momentum suggests that further consolidation is likely. The expected range for the following day is predicted to be between 0.6070 and 0.6110.
Looking ahead to the next 1-3 weeks, the analysis from last Thursday remains relevant. The oversold weakness of the NZD has not yet stabilized, and a breakthrough and sustained stay below 0.6050 is necessary for further decline. The probability of the NZD breaking below 0.6050 will remain as long as 0.6145, the strong resistance level, is not breached. If the NZD does break below 0.6050, the next level to watch is 0.6005.
Overall, the NZD is expected to stay within a consolidation range of 0.6070 to 0.6110 in the short term. However, the longer-term outlook suggests that the currency still shows signs of oversold weakness that has not stabilized. A clear break below 0.6050 is needed for a sustained decline to occur, but this will be dependent on whether the strong resistance level of 0.6145 is breached. In the coming weeks, the NZD may face further challenges if it does not break below the key level of 0.6050.
