On a break of 0.6960, FX Strategists at UOB Group believe that additional declines in the NZD/USD will acquire traction.
Observation for 24 hours: “Yesterday, we said that “the fall is highly oversold and NZD is unlikely to weaken much further,” and that the currency will “move between 0.6975 and 0.7020.” NZD, on the other hand, fell to 0.6965 before recovering. While the negative momentum has improved slightly, there is still opportunity for NZD to reach 0.6960 before a more substantial rebound. The next level of support, at 0.6940, is unlikely to be tested. 0.7005 is the first level of resistance, followed by 0.7025.”
Within the next 1-3 weeks: “Since last Thursday, we’ve predicted the NZD to ‘trade between 0.6960 and 0.7105.’ (24 Jun, spot at 0.7045). ‘Downward momentum is beginning to improve, but NZD must close below 0.6960 before a persistent loss can be envisaged,’ we said yesterday (30 June, spot at 0.6995). Our opinion has not changed when the New Zealand dollar fell to an overnight low of 0.6965. Overall, as long as the NZD does not rise over 0.7040 (the’strong resistance’ level was around 0.7055 yesterday), the probability of a persistent slide remains. The next support level below 0.6960 is 0.6940, followed by 0.6920.”/nRead More