According to UOB Group FX analysts Quek Ser Leang and Peter Chia, a mix of decelerating momentum and oversold conditions indicates the New Zealand Dollar (NZD) is set to consolidate, likely within the 0.5715–0.5750 range. Over the longer term, despite the downward momentum remaining mild, the NZD could still drift lower towards 0.5690.
24-HOUR VIEW: “Last Friday, we anticipated further weakness in the NZD but noted it lacked sufficient momentum to hit 0.5715. Our bearish stance was generally correct, although the pair briefly dipped below that level to touch 0.5712 during the NY session before rebounding to close at 0.5733 (-0.36%). Given the slowing downward momentum combined with oversold conditions, NZD is expected to enter a consolidation phase today, likely trading between 0.5715 and 0.5750.”
1-3 WEEKS VIEW: “We adopted a negative outlook on the NZD last Friday (09 Jan, spot at 0.5750), suggesting that a slight increase in downward momentum could push it toward 0.5715. The pair subsequently fell to a low of 0.5712. Although the bearish momentum remains tepid, the NZD could continue its gradual descent towards 0.5690. Overall, the current mild downward pressure will only be considered eased if there is a breach of 0.5770 (down from Friday’s ‘strong resistance’ level of 0.5785).”
