NZD/USD: a test of 0.6770 loses traction – UOB

In view of FX Strategists at UOB Group, a drop to the 0.6770 area seems to have run out of momentum in the near term.

Key Quotes

“NZD plunged this morning after RBNZ’s announcement. The drop appears to be overstretched but with no signs of stabilization, a test of the major 0.6800 support would not be surprising. Only a move back above 0.6865 would indicate that the decline has stabilized”.

“The sharp drop in NZD this morning is clearly not expected. The drop appears to be running ahead of itself and we are not inclined to chase it lower. That said, unless NZD can reclaim 0.6890, the pressure is clearly on the downside even though the odds for extension to the next support near 0.6770 are not high”.