NZD/USD is expected to keep the side-lined theme unchanged for the time being, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we held the view that NZD ‘could dip below 0.6600 but it is left to be seen if it can maintain a foothold below this level’. However, NZD staged a sudden and sharp rebound from a low of 0.6602 (overnight high of 0.6687). While the rapid bounce appears to be overdone, there is scope for NZD to test the 0.6705 resistance first before the current upward pressure should ease (next resistance is at 0.6750). Support is at 0.6655 followed by 0.6630. The 0.6602 low is unlikely to come into the picture for today.”
Next 1-3 weeks: “We highlighted yesterday (09 Sep, spot at 0.6625) that NZD ‘has to close below 0.6600 before further decline towards 0.6530 can be expected’. We added, ‘the prospect for NZD to close below 0.6600 is quite high and it would increase further within these few days as long as NZD does not move above 0.6690’. NZD subsequently dropped to 0.6602 before snapping back up to an overnight high of 0.6687. While the ‘strong resistance’ level at 0.6690 is still intact, the rapid loss in momentum suggests that NZD is not ready for further decline just yet. From here, the outlook is mixed and NZD could trade between 0.6600 and 0.6750 for now.”
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