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In opinion of FX Strategists at UOB Group, NZD/USD could shed further ground and shift the attention to sub-0.7100 levels in the near-term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘there is scope for NZD to move to 0.7165’. The subsequent weakness in NZD exceeded our expectation as NZD dropped to 0.7148 before closing on a weak note at 0.7160 (-1.09%). While the rapid decline appears to be running ahead of itself, NZD could test 0.7130 first before the current weakness should stabilize. Resistance is at 0.7180 followed by 0.7205.”

Next 1-3 weeks: “We highlighted last yesterday (11 Jan, spot at 0.7200) that the recent positive phase has ended and the near-term bias is on the downside. We added, ‘any weakness is viewed as part of a 0.7130/0.7270 range’. While there is no change in our view, we did not quite expect the sharp drop of -1.09% (NY close of 0.7160). Downward momentum has improved and would continue to improve as long as 0.7250 is not taken out. Looking ahead, a clear break of 0.7130 would shift the focus to 0.7080.”