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In light of the recent price action, the next move in NZD/USD could be a test of the 0.6270 region, suggested FX Strategists at UOB Group.

Key Quotes

“We expected NZD to ‘edge downward towards 0.6365’ yesterday but it sliced through the support and plummeted to a low of 0.6325. While severely oversold, the decline in NZD has scope to probe the 0.6300 first before stabilization can be expected. Resistance is at 0.6350 but only a move above 0.6365 would indicate the current downward pressure has eased.”

Next 1-3 weeks; “Our view from Wednesday (19 Feb, spot at 0.6390) wherein NZD ‘has to close below the solid 0.6375 support or the next level at 0.6325 may not come into the picture’ became outdated quickly as NZD plunged and touched 0.6325 yesterday (20 Feb). The outsized drop of – 0.83% (NY close of 0.6332) suggests further NZD weakness is likely. The next support is at 0.6270. On the upside, the ‘strong resistance’ at 0.6380 is unlikely to come under threat, at least for the next few days.”