NZD/USD risks further downside – UOB

Pablo Piovano FXStreet

NZD/USD could grind lower to the 0.6540 region in the near-term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that NZD ‘could drop further from here but any weakness is viewed as part of a 0.6560/0.6620 range’. However, NZD traded in a quiet manner between 0.6572 and 0.6602 before closing largely unchanged at 0.6582 (-0.03%). The underlying tone still appears soft and we continue to see chance for NZD to drift lower to 0.6560. For today, a sustained decline below this level is unlikely (next support is at 0.6540). Resistance is at 0.6600 but the stronger level is at 0.6615.”

Next 1-3 weeks: “We highlighted yesterday that ‘upward momentum is lackluster and the odds for a sustained advance above 0.6690 are not high’ and we expected NZD to ‘trade at a higher range of 0.6580/0.6710’. The sudden and sharp sell-off during NY hours was unexpected as NZD plunged to a low of 0.6583. While the rapid drop appears to be running ahead of itself, downward momentum has improved and NZD could test the major support at 0.6540. A retest of last month’s low of 0.6512 is not ruled out but for now, the prospect for such a move is not that high. Overall, NZD is expected to stay under pressure unless it can move above 0.6645 (‘strong resistance’ level).”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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