Following the ongoing price action, NZD/USD could move to the 0.6490 region in the next weeks, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted the ‘severely oversold conditions’ yesterday and noted that while NZD could continue to weaken, any decline is viewed as ‘a lower trading range of 0.6525/0.6570’. NZD subsequently dipped to 0.6521 before rebounding to end the day little changed at 0.6544 (-0.03%). Despite the recovery, the underlying tone remains weak and we see chance for NZD to test 0.6520 again. For today, the next support at 0.6490 is not expected to come into the picture. Resistance is at 0.6560 but only a move above 0.6575 would indicate the current weakness has stabilized.”
Next 1-3 weeks: “NZD extended its decline as it dropped to 0.6521 before rebounding to end the day a tad lower at 0.6544 (-0.03%). As highlighted yesterday (28 Jan, spot at 0.6545), the sharp sell-off on Monday is the ‘second leg’ of a pullback and NZD could weaken further to 0.6490. Overall, NZD is expected to stay on the back foot unless it can reclaim 0.6600 (no change in ‘strong resistance’ level).”
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