There is scope for the New Zealand Dollar (NZD) to test the 0.5665 level; however, a clear break above this level is unlikely. In the longer run, the weakness in NZD has stabilized. For the time being, it is likely to trade within a range between 0.5605 and 0.5695, according to UOB Group’s FX analysts Quek Ser Leang and Peter Chia.
**Weakness in NZD Has Stabilized**
**24-Hour View:**
NZD dropped to a low of 0.5607 last Friday before rebounding. Yesterday, we noted that “the rebound amid slowing momentum and oversold conditions suggests that instead of declining today, NZD is more likely to trade in a range, probably between 0.5610 and 0.5645.” NZD subsequently traded within a higher range of 0.5620 to 0.5651 before closing at 0.5647 (+0.35%).
Upward momentum is starting to build, but it is not yet strong enough to indicate a sustained rise. That said, there is scope for NZD to test 0.5665. We do not expect a clear break above this level, nor do we expect the next resistance at 0.5695 to come under threat. Support levels are at 0.5630 and 0.5620.
**1-3 Weeks View:**
On Wednesday, 5 November (spot at 0.5645), we highlighted that “downward pressure has increased, and NZD could weaken to 0.5600 next.” After NZD dropped to a low of 0.5607 on Friday and then rebounded, we mentioned yesterday (10 November, spot at 0.5630) that “the new low was accompanied by a positive divergence on momentum indicators, suggesting waning downside momentum. Unless NZD can break below 0.5600 within one to two days, a breach of the ‘strong resistance’ at 0.5660 (previously at 0.5680) would mean that the weakness in NZD from late last month has stabilized.”
NZD then rose to a high of 0.5651. Although the strong resistance level at 0.5660 has not been breached yet, downward momentum has largely faded. As stated yesterday, the weakness in NZD has stabilized. For now, we expect NZD to continue trading in a range between 0.5605 and 0.5695.
https://bitcoinethereumnews.com/finance/clear-break-above-0-5665-is-unlikely-uob-group/
