The New Zealand Dollar (NZD) is expected to continue range trading with the range likely to be between 0.5875 and 0.5920. Analysts at UOB Group, Quek Ser Leang and Peter Chia, have noted that despite the possibility of further weakness in the NZD, the severely oversold conditions suggest limited downside potential. The key level to watch out for is 0.5850.
In the short-term, after reaching a low of 0.5878, there were signs of slowing momentum indicating that the NZD is unlikely to weaken significantly further. The range trading scenario played out as expected within a narrower range of 0.5884 to 0.5905, closing at 0.5889 (+0.09%). The lack of fresh clues from the price action points towards further range trading in the near future. The expected range for the upcoming trading session is 0.5875 to 0.5915.
Looking ahead in the medium to long-term, the possibility of further NZD weakness is not completely ruled out, but the severely oversold conditions suggest that the downside potential is limited. The next significant level to monitor is at 0.5850, which could serve as a crucial support level.
Overall, the technical analysis suggests that the NZD is likely to continue trading within a range in the near future. The current market conditions indicate that while there is a possibility of further weakness in the NZD, the downside potential is limited due to oversold conditions. Monitoring key levels such as 0.5850 will be crucial in determining the future direction of the NZD.