After analyzing the recent movement of the New Zealand Dollar (NZD), it is evident that there is still potential for the currency to drop below 0.6000. UOB Group FX strategists Quek Ser Leang and Peter Chia have noted that the NZD has shown signs of weakness and could continue to decline in the near future.
In the short-term view, it was predicted that the NZD would decline, and this prediction was correct as the currency dropped to as low as 0.6006. However, the rebound in early Asian trading suggests that the momentum may be slowing down. With the currency currently trading in a range of 0.6010/0.6045, it is possible that NZD could see some sideways movement in the coming days.
Looking at the medium-term view, it was initially mentioned that downward momentum was building, but not strong enough to indicate a sustained decline. As NZD continued to drop, it was highlighted that there was a possibility of breaking below 0.6030 and reaching 0.6005. The currency did in fact drop to 0.6006, and the oversold conditions could result in a period of sideways trading. As long as the strong resistance level at 0.6070 is not breached, there remains room for NZD to drop further.
The New Zealand Dollar is facing downward pressure and could potentially see further declines below 0.6000. The technical analysis and short to medium-term outlook suggest that the currency may continue to weaken in the upcoming days. Traders and investors should keep a close eye on key support and resistance levels to gauge the future movement of the NZD in the forex market.
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