The price movements are likely part of a consolidation phase between 0.5590 and 0.5625. In the longer run, NZD is expected to move lower; if it breaks below 0.5565, it could decline further to 0.5540, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD is expected to move lower

24-HOUR VIEW: "NZD dropped to a low of 0.5582 last Thursday. On Friday, we were of the view that 'there is a chance for NZD to test 0.5565'. We pointed out that 'a continued decline below this level is unlikely'. Our expectations did not materialise, as NZD traded within a range of 0.5581/0.5615. The price movements are likely part of a consolidation phase. Today, we expect NZD to trade between 0.5590 and 0.5625."

1-3 WEEKS VIEW: "Last Thursday (20 Nov, spot at 0.5610), we highlighted that 'given the sharp increase in downward momentum, we expect NZD to weaken to 0.5585, and potentially 0.5565'. After NZD dropped to 0.5582, we indicated on Friday that we 'continue to expect a lower NZD and if it breaks below 0.5565, it could decline further to 0.5540'. There is no change in our view. On the upside, if NZD breaks above 0.5640 (no change in ‘strong resistance’ level), it would mean that the current downward pressure has eased."