The kiwi dollar could drop further to the sub-0.6500 area vs. the greenback in the next weeks, suggested FX Strategists at UOB Group.
24-hour view: “NZD plummeted to an overnight low of 0.6536 before ending the day on a weak note at 0.6651 (-1.25%). The weakness exceeded our expectation as we were of the view that ‘0.6545 is unlikely to come into the picture’. While deep in oversold territory, the current weakness is yet to show sign of stabilizing. That said, the pace of any further weakness is likely to be slower and the next major support at 0.6490 is unlikely to come under threat (0.6520 is already quite a strong level). Resistance is at 0.6580 followed by 0.6615.”
Next 1-3 weeks: “There is not much to add to our update from yesterday (23 Sep, spot at 0.6610). We highlighted that ‘the negative phase has more room to run’ and added, ‘the next support is at 0.6545 followed by 0.6490’. NZD dropped below 0.6545 (overnight low of 0.6536) and the outlook remains weak. From here, the focus is at 0.6490. On the upside, the ‘strong resistance’ level has moved lower to 0.6650 from 0.6720.”