FX Strategists at UOB Group expect the Kiwi Dollar to depreciate towards the 0.6450 region vs. the greenback in the next weeks.
Key Quotes
24-hour view: “While we expected NZD to weaken yesterday, we noted that “the next technical support at 0.6450 could be out of reach for now”. In line with expectation, NZD dropped to a low of 0.6474 before ending the day on a soft note (NY close of 0.6477). From here, there is scope for NZD to grind lower but a break of the strong 0.6450 support still seems unlikely. On the upside, only a move back above 0.6520 would indicate that a short-term low is in place (minor resistance is at 0.6500)”.
Next 1-3 weeks: “NZD registered a fresh year’s low of 0.6474 yesterday. The price action was not surprising as we highlighted yesterday, we expect further NZD weakness to 0.6450. However, despite making fresh low, the improvement in downward momentum is not as much as preferred and we have doubts about the sustainability of the current NZD weakness. That said, only a break of the ‘key resistance’ at 0.6550 (level previously at 0.6570) would indicate that a short-term bottom is in place. Until then, NZD is expected to remain under pressure but it is unlikely that NZD would ‘accelerate’ lower from here (the next support below 0.6450 is at 0.6420)”.
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