New Zealand Dollar (NZD) could test 0.5710; given the oversold conditions, it is unlikely to reach the major support at 0.5690. In the longer run, outlook for NZD has shifted to negative; the level to watch is 0.5690, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Outlook for NZD has shifted to negative

24-HOUR VIEW: "After NZD plunged to a low of 0.5735 last Thursday, we highlighted the following on Friday: 'The rapid increase in downward momentum is likely to lead to further declines. That said, we do not expect the major support at 0.5690 to come into view today. Note that there is another rather strong support level at 0.5720.' Our view was not wrong, as NZD fell to a low of 0.5717. Downward momentum remains strong, and today, NZD could test 0.5710. Given the oversold conditions, NZD is unlikely to reach the major support at 0.5690. Resistance levels are at 0.5735 and 0.5760."

1-3 WEEKS VIEW: "We turned negative last Wednesday (08 Oct, spot at 0.5750), indicating that 'the outlook for NZD has shifted to negative, and the level to watch is 0.5690.' We will continue to hold the same view as long as the ‘strong resistance’ at 0.5780 (level was at 0.5810 last Friday) continues to hold. Looking ahead, the next level to watch below 0.5690 is 0.5660."