The current price movements are likely part of a range-trading phase between 0.5640 and 0.5680. In the longer run, downward pressure has increased; NZD could weaken to 0.5600 next, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD might weaken to 0.5600 next

24-HOUR VIEW: "Following the sharp drop in NZD to a low of 0.5635 two days ago, we highlighted yesterday, when NZD was at 0.5645, that 'the outsized drop appears to be overdone, but NZD could test 0.5620 before stabilisation can be expected'. We added, 'the next support at 0.5600 is unlikely to come under threat'. Instead of testing 0.5620, NZD traded within a range of 0.5631/0.5665. The price movements are likely part of a range-trading phase. Today, we expect NZD to trade between 0.5640 and 0.5680."

1-3 WEEKS VIEW: "Our update from yesterday (05 Nov, spot at 0.5645) remains valid. As highlighted, 'downward pressure has increased, and NZD could weaken to 0.5600 next'. Overall, only a breach of 0.5705 (‘strong resistance’ level was at 0.5750 yesterday) would indicate that the decline from late last week has stabilised."