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In opinion of FX Strategists at UOB Group, a deeper retracement in NZD/USD seems to be losing traction.

Key Quotes

24-hour view: “Our expectation for NZD to ‘edge upwards within a higher trading range’ did not materialize as it slipped from a high of 0.6504. Momentum indicators are mostly neutral and NZD is expected to trade sideways for today, likely between 0.6460 and 0.6500.”

Next 1-3 weeks: “While we have held a negative view in NZD since early last week, we cautioned last Friday (31 Jan, spot at 0.6485) that NZD ‘has to close below the solid 0.6460 support before further weakness to 0.6420 can be expected’. NZD subsequently edged slightly below 0.6460 but did not register a closing below this solid support. Despite the strong advance of +0.41% yesterday (04 Feb), our ‘strong resistance’ level at 0.6520 is still intact. That said, after the rapid bounce, the odds for further NZD weakness have diminished. Looking ahead, a breach of 0.6520 would indicate that the start of a correction phase in NZD.”