FX Strategists at UOB Group believe further weakness awaits the Kiwi Dollar in the next weeks.
Key Quotes
24-hour view: “NZD traded between 0.6725 and 0.6756 yesterday, much narrower than our expected consolidation range of 0.6725/0.6775. There is no indication of an imminent end to the consolidation phase and we continue to expect NZD to trade sideways from here, albeit likely at a lower range of 0.6710/0.6750″.
Next 1-3 weeks: “NZD dipped to a 2-week low of 0.6721 last Friday before rebounding to end the day at 0.6748 (NY close of 0.6748, +0.10%). The mild recovery does not change our current view wherein we see risk of NZD breaking below the year-to-date low of 0.6688. At this stage, it is unclear whether any weakness in NZD can be sustained as 0.6670/80 is major long-term support zone and is unlikely to yield so easily. All in, we expect NZD to stay under pressure until it can reclaim the ‘key resistance’ that is currently at 0.6810″.
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