UOB Group’s FX Strategists noted that further consolidation looks the most likely scenario in NZD/USD for the time being.
Key Quotes
24-hour view: “We expected NZD to ‘trade sideways between 0.7080 and 0.7135’ yesterday. NZD subsequently traded within a narrower range than expected (0.7076/0.7115) before closing little changed at 0.7102 (+0.02%). The underlying tone has weakened somewhat and this could lead to NZD edging lower but any weakness is expected to encounter strong support at 0.7065. The major support at 0.7040 is not expected to come into the picture. Resistance is at 0.7115 followed by 0.7130.”
Next 1-3 weeks: “Our view from yesterday (08 Sep, spot at 0.7105) still stands. As highlighted, the recent NZD strength has run its course and NZD is likely consolidate and trade between 0.7040 and 0.7160. Looking ahead, a clear break of 0.7040 would indicate that the start of a deeper pullback in NZD.”
