NZD/USD remains under some downside pressure and could slip back to the 0.7125 level in the next weeks.
Key Quotes
24-hour view: “We highlighted yesterday that ‘the rapid rise appears to be running ahead of itself and NZD is unlikely to strengthen further’. We did not anticipate the sharp drop that sent NZD plummeting to an overnight low of 0.7153. Downward momentum is beginning to improve and NZD could dip below the major support at 0.7150. However, oversold conditions suggest that the next support at 0.7125 is unlikely to come under threat. On the upside, a break of 0.7210 would indicate that the current weakness has stabilized (minor resistance is at 0.7195).”
Next 1-3 weeks: “We have expected NZD to trade within a range since the start of the week. NZD fell sharply overnight and is approaching a relatively strong support at 0.7150. Shorter-term downward momentum is beginning to improve and NZD could edge lower to 0.7125. At this stage, the prospect for a sustained decline below this level is not high. On the upside, a break of 0.7230 (‘strong resistance’ level) would indicate that the current mild downward pressure has eased.”
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