FX Strategists at UOB Group noted the pair could retreat further and test the 0.6675 level in the next weeks.
Key Quotes
24-hour view: “The support at 0.6750 highlighted yesterday was slightly breached as NZD touched a low of 0.6748 before rebounding. Downward pressure has eased with the recovery and the current movement is viewed as part of a consolidation phase. In other words, NZD is expected to trade sideways for today, likely within a 0.6750/0.6805 range”.
Next 1-3 weeks: “While we noted yesterday that the “recent upward pressure has eased” and “NZD is likely to trade sideways within a 0.6750/0.6860 range”, the rapid pace of the decline that quickly came close to the bottom of the expected range was not exactly anticipated (overnight low of 0.6754, as NZD lost a whopping -1.17%). Despite the sharp drop, we are not convinced that the current weakness in NZD is the start of a fresh bearish phase. That said, there is scope for a test of the major 0.6675 level even though the prospect for such a move is not high (on a shorter-term note, 0.6690 is already as strong support). On the upside, NZD has to move and stay above 0.6825 in order to indicate that the current downward pressure has eased”.
Share
