Ella 
24-hour view: We expect NZD/USD to weaken yesterday and we point to 0.6100 as the level to watch. NZD/USD fell more than expected, falling to 0.6069. While the decline is oversold, the strong downside momentum suggests that NZD/USD could break below June lows around 0.6050. However, it remains to be seen whether NZD/USD can gain a foothold below this level (next support at 0.6020). To maintain momentum, NZD/USD must hold at 0.6120 (with minor resistance at 0.6100).
1-3 WEEK OUTLOOK: Yesterday (Aug 2nd when prices were at 0.6130) we noted that “short-term downside momentum is rapidly building” and added that “NZD/USD must break and hold below 0.6100 for this to be possible continued to decline”. We did not expect a sharp drop in NZD/USD, closing down 1.14% (NY close at 0.6080). Price action suggests that NZD/USD may continue to weaken. The level to watch is 0.6020, followed by the yearly low around 0.5985. As long as NZD/USD holds below 0.6160 (yesterday’s “strong resistance” at 0.6200), downside risks remain unchanged.
