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Levels to watch are 0.6135 and 0.6105 – UOB Group

Price action continues to suggest further New Zealand Dollar (NZD) weakness, albeit likely at a slower pace. Levels to watch are 0.6135 and 0.6105, note UOB Group FX analysts Quek Ser Leang and Peter Chia.

NZD may drop towards 0.6135

24-HOUR VIEW: “While our expectation for the NZD to ‘continue to weaken’ last Friday was correct, our view that it is ‘unlikely to break below significant support at 0.6170’ was not. NZD easily broke below 0.6170, hitting a low of 0.6146. Conditions are severely oversold and rather than continuing to weaken today, the NZD is more likely to trade in the 0.6145/0.6205 range.”

WEEKS 1-3: “Last Wednesday (October 02, point at 0.6285), we noted that the “downward momentum increased slightly”. We reckoned the “pullback in NZD could reach 0.6225”. After NZD fell below 0.6225, we indicated last Friday (04 Oct, spot at 0.6215) that “momentum has increased further and NZD could continue to decline to 0.6170″. I added: “we will expect the NZD to weaken as long as it remains below 0.6295 (the “strong resistance” level). In NY trade, the NZD fell below 0.6170, touching a low of 0.6146. Although price action continues to suggest further NZD weakness, oversold conditions suggest a slower pace of decline. The next levels to watch are 0.6135 and 0.6105. On the upside, the ‘strong resistance’ level dropped to 0.6220 from 0.6295.”

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