The Kiwi Dollar could extend the downside to the 0.6260 region vs. the Greenback in the near term, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our view for NZD yesterday was it has “scope to extend lower but major 0.6300 support is unlikely to come into the picture today”. NZD came close to taking 0.6300 twice as it rebounded from an Asian hour low of 0.6306 before dropping to 0.6305 during late NY hours. Downward pressure has eased somewhat but NZD is not out of the woods yet. From here, NZD could dip below 0.6300 but any weakness is unlikely to be sustained (next support is at 0.6280 followed by the stronger level of 0.6260). Resistance is at 0.6335 followed by 0.6350″.
Next 1-3 weeks: “NZD dropped to a low of 0.6305 yesterday before ending the day on a soft note at 0.6312 (-0.34%). The price action was not surprising as we indicated yesterday (29 Aug, spot at 0.6340) that “0.6300 appears to be within reach”. We added, “a NY closing below 0.6300 would indicate NZD is ready to tackle 0.6260, possibly 0.6235″. On the upside, only a break of 0.6375 (‘key resistance’ was at 0.6400 yesterday) would suggest that the weakness in NZD has run its course”.
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