NZD/USD scope for a test of 0.7135 – UOB

FX Strategists at UOB Group believe the Kiwi Dollar could slip back to the 0.7130 area vs. the greenback in the near term.

Key Quotes

24-hour view: “NZD tested last week’s low near 0.7167 before recovering. Despite the bounce from the low, the undertone is still weak and another test of the strong 0.7165/70 support is not ruled out. That said, a sustained break below this level seems unlikely (the next support at 0.7135 is unlikely to seriously threatened). Resistance is at 0.7220 followed by 0.7240”.

Next 1-3 weeks: “We have held the same view that the current pull-back in NZD “has room to extend to 0.7135” since last Wednesday. There is no change to the outlook even though from here, the odds for a sustained break below this level have increased slightly (there is another strong support at 0.7100). Overall, NZD is expected to stay under pressure in the coming days unless it can reclaim 0.7240 (key resistance adjusted lower from 0.7280)”.