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According to FX Strategists at UOB Group, the stance on NZD/USD remains bearish and the door stays open for a move to the 0.6300 region in the next weeks.

Key Quotes

24-hour view: “Our expectation for the weakness in NZD to “extend lower” was incorrect as it rebounded to a high of 0.6372. While downward pressure has dissipated, the current movement is viewed as part of consolidation phase and not the start of a sustained recovery. In other words, NZD is expected to trade sideways for today, likely between 0.6340 and 0.6390″.

Next 1-3 weeks: “While we held the view that a “short-term top is in place” and NZD is likely to “trade sideways” since last Tuesday, we highlighted on Thursday (07 Nov, spot at 0.6365) that “if NZD were to close below the bottom of the expected 0.6350/0.6450 range”, it would “increase risk of a pull-back to 0.6300″. NZD dropped to 0.6323 last Friday before ending the day at 0.6328 (-0.65%). In other words, instead of trading sideways, NZD is now expected to trade with a downward bias towards 0.6300. At this stage, the prospect for a sustained decline below this level is not high (there is another support at 0.6285). On the upside, only a move above 0.6400 (‘strong resistance’ level) would indicate that current downward bias has eased”.