NZD/USD: Major support at 0.6040 is out of reach – UOB Group

The New Zealand Dollar (NZD) could pullback further, but slowdown in momentum suggests the major support at 0.6040 could be out of reach, UOB Group analysts note.

A break above 0.6135 to turn momentum upwards

24-HOUR VIEW: “We expected NZD to trade in a sideways range of 0.6080/0.6120 yesterday. However, the price action did not quite pan out as we expected. NZD rose to 0.6110 before staging a surprisingly sharp pullback to a low of 0.6066. NZD closed at 0.6075 (-0.25%). Today, NZD could continue to pullback. Given the current mild downward momentum, any decline is unlikely to reach the major support at 0.6040. Resistance levels are at 0.6085 and 0.6105.”

1-3 WEEKS VIEW: “Our update from yesterday (01 Jul, spot at 0.6095) still stands. As highlighted, while there is still room for NZD to continue to weaken, the slowdown in momentum suggests 0.6040 could be out of reach this time. Conversely, if NZD breaks above 0.6135 (no change in ‘strong resistance’ level), it would mean that the weakness in NZD that started in the middle of last month has ended.”