NZD/USD: Any decline is likely to be part of a lower range of 0.5925/0.5970 – UOB Group

New Zealand Dollar (NZD) could pull back against US Dollar (USD), but any decline is likely to be part of a lower range of 0.5925/0.5970. In the longer run, weakness from early this month has come to an end; NZD is likely to consolidate between 0.5905 and 0.6000, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Weakness from early this month has come to an end

24-HOUR VIEW: "NZD fell to a low of 0.5907 last Thursday and then rebounded. On Friday, when NZD was at 0.5940, we indicated that 'the rebound and slowing momentum suggests that, rather than continuing to weaken, NZD is more likely to consolidate today, probably in a range of 0.5920/0.5965.' Instead of consolidating, NZD rose from 0.5932 to 0.5991 before pulling back to close at 0.5961 (+0.49%). In the early Asian session, NZD pulled back further. While there is room for the pullback to extend, any decline is likely to be part of a lower range of 0.5925/0.5970."

1-3 WEEKS VIEW: "We have been expecting a weaker NZD since early this month. In our latest narrative from last Thursday (17 Jul, spot at 0.5935), we stated that 'the NZD weakness is intact.' However, we pointed out that 'it remains to be seen if NZD has enough momentum to reach June’s low, near 0.5885.' On Friday, NZD rose to a high of 0.5991, breaking above our ‘strong resistance’ level of 0.5980. The breach of the ‘strong resistance’ indicates that the weakness in NZD has come to an end. The current price movements are likely part of a consolidation phase between 0.5905 and 0.6000."