NZD/USD: A move to 0.7130 is not ruled out – UOB

In opinion of FX Strategists at UOB Group, NZD/USD could extend the downside to the 0.7130 level in the near-term.

Key Quotes

24-hour view: “While our view for NZD to weaken was correct, we were of the view that ‘0.7210 is unlikely to come into the picture’. However, NZD cracked 0.7210 and plunged to 0.7173. The swift and sharp drop appears to be overdone but there is room for the weakness in NZD to test 0.7155 first before stabilizing. The next support at 0.7130 is likely out of reach. Resistance is at 0.7210 followed by 0.7230.”

Next 1-3 weeks: “We highlighted yesterday (04 Mar, spot at 0.7245) that ‘a clear break of 0.7210 would indicate that NZD is ready to move lower towards 0.7170’. The subsequent sudden and sharp drop to 0.7173 came as a surprise. Downward momentum has improved and NZD is likely to weaken to 0.7155. Further weakness to 0.7130 is not ruled out but this level may not come into the picture so soon.”