NZD/USD risks extra losses on a close below 0.6460 – UOB
The kiwi dollar could depreciate to the 0.6420 region vs. the greenback if NZD/USD closes below 0.6460, in opinion of FX Strategists at UOB Group.
24-hour view: “Our expectation for the ‘weakness in NZD to extend further’ did not materialize as NZD edged one pip below Friday’s low of 0.6454 before trading sideways. Downward momentum has eased considerably and the current movement is viewed as part of a consolidation phase. In other words, NZD is expected to trade sideways, likely between 0.6450 and 0.6485.”
Next 1-3 weeks: “The pace of the decline in NZD appears to have slowed as NZD traded in a quiet manner between 0.6453 and 0.6479 yesterday (03 Feb). For now, we are holding to our view from last Friday (31 Jan, spot at 0.6485) wherein ‘NZD has to close below the solid 0.6460 support before further weakness to 0.6420 can be expected’. On the upside, NZD has to move above 0.6520 (no change in ‘strong resistance’ level) in order to indicate that the current weakness has stabilized.”