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In opinion of FX Strategists at UOB Group, the kiwi dollar could accelerate the downside on a breach of the 0.6380 level.

Key Quotes

24-hour view: “The sudden and sharp sell-off that sent NZD plunging to an overnight low 0.6405 came as a surprise. The rapid decline is deep in oversold territory now but there is room for NZD to test the 0.6380 support first before stabilization can be expected. Resistance is at 0.6450 followed by 0.6480.”

Next 1-3 weeks: “After NZD rebounded strongly from a low of 0.6375, we highlighted on Tuesday (23 Jun, spot at 0.6475) that ‘downward pressure has more or less dissipated’ and expected NZD to ‘trade between 0.6380 and 0.6550’. While the 0.6380 level is intact, the sharp drop in NZD yesterday (24 Jun) suggests that a break of this level would not be surprising. From here, if NZD closes below 0.6380, it could weaken further to 0.6320. At this stage, the prospect for NZD to weaken further is not high but it would continue to increase unless NZD moves back above 0.6510.”