NZD/USD: The Pair Will Maintain Downward Momentum Below 0.6110

Strong momentum could lead to further weakness in NZD/USD. Strategists at UOB Group note that NZD could continue to weaken, but is unlikely to threaten the important support of 0.6040 for now.

A move above 0.6135 would halt downside momentum

24-hour view: “We did not expect a sharp decline in NZD/USD to 0.6075 (we expected sideways trading). While strong momentum could lead to further weakness, the important support of 0.6040 is unlikely to be threatened given the oversold conditions (another support is at 0.6060). To maintain downside momentum, NZD must remain below 0.6110 (minor resistance is at 0.6095).

1-3 week view: “We have held the view that NZD’s ‘likely to move lower to 0.6085’ since last Tuesday (June 18, current price 0.6130). A little over a week later, our view came true, although instead of a small move lower, the NZD fell sharply to 0.6075 during the North American session. The sharp decline has led to a rapid increase in momentum, and the NZD is likely to continue to weaken. The next support level to watch is 0.6040. Overall, only a break above 0.6135 (previously a ‘strong resistance’ level of 0.6160) will prevent the NZD from further weakness.

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