NZD/USD seen testing 0.6900 near term – UOB

The Kiwi Dollar is seen losing momentum towards the 0.6900 handle in the near term, noted FX Strategists at UOB  Group.

Key Quotes

24-hour view: “We expected a lower NZD yesterday but were of the view that “the support at 0.6900 is unlikely to yield so easily”. In line with expectation, NZD dropped to a low of 0.6903 before rebounding. That said, the extent and sharp pace of recovery came as a surprise (overnight high of 0.6970). The subsequent strong daily closing suggests that the rebound has some fuel left to extend to 0.6990. At this stage, a clear break of this level is not expected. Support is at 0.6935 followed by the still very strong level of 0.6900”.

Next 1-3 weeks: “we highlighted the “increasing risk of a short-term low” and added that “in order to revive the current flagging momentum, NZD has to stay below 0.7005 within these few days. NZD closed well below 0.7005 by the end of Tuesday and extended its decline to hit an overnight low of 0.6929 earlier this morning. From here, we are expecting NZD to challenge the next support at 0.6900 and a break of this level would shift the focus to 0.6865. ‘Stop-loss’ is adjusted lower to 0.7005 from 0.7085 previously”.