NZD/USD risks a drop to 0.7155 – UOB

In view of FX Strategists at UOB Group, the Kiwi Dollar could slip back to the mid-0.7100s vs. the buck in the next weeks.

Key Quotes

“The anticipated NZD weakness exceeded our expectation as the break of 0.7220 led to a sharp decline to an overnight low of 0.7172. The drop appears to be over-extended even though there appears to be room for another leg lower towards the major 0.7155/60 support (before a recovery can be expected)”.

“As highlighted yesterday, a clear move below 0.7220 would indicate that a deeper pull-back towards 0.7155/60 has started. The overnight low has been 0.7172 and from here, the immediate pressure is still on the downside (unless NZD can quickly reclaim 0.7270). A clear break below 0.7155 would suggest that NZD has entered a bearish phase (with an immediate target of 0.7050)”.