New Zealand Dollar (NZD) is likely to range-trade between 0.5700 and 0.5740. In the longer run, there is a chance for NZD to test 0.5660 before the risk of a stronger recovery increases, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Chance for NZD to test 0.5660 before recovering

24-HOUR VIEW: "Yesterday, we expected NZD to 'range-trade between 0.5690 and 0.5730.' Our view of range trading was not wrong, even though NZD traded in a narrower range than expected (0.5706/0.5731). The price action provides no fresh clues, and we continue to expect range-trading today, most likely within a range of 0.5700/0.5740."

1-3 WEEKS VIEW: "Last Wednesday (08 Oct, spot at 0.5750), we indicated that 'the outlook for NZD has shifted to negative, and the level to watch is 0.5690.' After NZD fell to a low of 0.5685, we highlighted yesterday (15 Oct, spot at 0.5710) that 'while there has been no significant increase in downward momentum, there is a chance for NZD to test 0.5660 before the risk of a stronger recovery increases.' We will maintain the same view as long as 0.5750 (no change in ‘strong resistance’ level) holds."