NZD/USD: a test of 0.6235 remains on the cards

The Kiwi Dollar keeps facing downside risks to the 0.6230 region in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Despite a recovery overnight, NZD was largely within our expected 0.6420/0.6505 range. Today, it is likely that NZD may grind higher but gains may be limited at 0.6485. Support is expected at 0.6430”.

Next 1-3 weeks: “On Wed (7-Aug), the key support at 0.6500 was decisively taken out and NZD tumbled to a low of 0.6378. With the move, it immediately shifts the focus to the next ‘key supports’ of 0.6348 (last reached in Jan 2016) and 0.6235 (Sep 2015’s low). At the current juncture, although the ‘downside bias’ remains, downside momentum is still not strong enough to argue for a fast move towards those stated levels. We expect stiff resistances at both 0.6480 and 0.6500 and only a recovery above 0.6530 would indicate that downside pressures have eased”.

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