NZD/USD neutral near term, seen testing 0.6860 – UOB

The Kiwi Dollar is expected to advance further and test the 0.6860 area vs. the greenback, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The ‘target’ indicated at 0.6845/50 yesterday was not met as NZD eased off from a high of 0.6824. From here, the bias is tilted to the downside but we do not expect a sustained move below the strong 0.6760 support (next support is at 0.6740). Resistance is at 0.6805 followed by yesterday’s high near 0.6825″.

Next 1-3 weeks: “In our last update on 13 Jul (spot at 0.6775), we were of the view that there is scope for NZD to “test the major 0.6675 support but the prospect for such a move is not high”. Since then, NZD has traded sideways but staged a strong rebound last Friday and closed higher by +1.02% last Friday (NY close of 0.6810), the largest 1-day gain since late May. The price action suggests that the downside risk has dissipated and the immediate pressure has shifted to the upside. For now, we expect NZD to retest the month-to-date high near 0.6860 even though this is a major resistance and is unlikely to yield so easily”.