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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”.