NZD/USD risks a decline to the mid-0.6300s – UOB

FXStreet reports that  FX Strategists at UOB Group suggested the kiwi dollar could depreciate further vs. the greenback and force NZD/USD to drop to the 0.6350 region in the next weeks.

24-hour view: “Our expectation for NZD to ‘extend its weakness to 0.6375’ did not quite materialize as it dropped to a low of 0.6382. Despite the lackluster downward momentum, the risk remains on the downside even though any weakness is unlikely to challenge the major support at 0.6350 for now. Resistance is at 0.6400 followed by 0.6415.”

Next 1-3 weeks: “We have held a negative view in NZD when it was trading at a much a higher of 0.6545. Since then, we have upgraded the weak outlook several times and in our latest narrative from last Friday (07 Feb, spot at 0.6460), we noted the lackluster momentum and held the view that NZD ‘could edge lower towards 0.6420’. However, instead of edging lower, NZD registered the largest 1-day decline in 6 months as it plunged by -0.91% (NY close of 0.6400). The sudden and strong pick-up in momentum is likely to lead to further NZD weakness towards 0.6350 (next support is at 0.6325). Only a move above 0.6460 (‘strong resistance’ level was at 0.6505 on Friday) would indicate the current weak phase has run its course.”