NZD/USD: Diminishing odds for further retracements – UOB

In light of FX Strategists at UOB Group, extra downside in NZD/USD seems to be losing momentum for the time being.

Key Quotes

24-hour view: “Our expectation for NZD to ‘dip below 0.6370’ was wrong as it lifted off after touching a low of 0.6381. The robust and rapid rise has room to move above the 0.6510 strong resistance level but severely overbought conditions suggest a sustained rise beyond 0.6550 is unlikely. Support is at 0.6460 followed by 0.6430.”

Next 1-3 weeks: “Our view from last Friday (12 Jun, spot at 0.6420) was that ‘the near-term bias for NZD is on the downside but any weakness is likely limited to 0.6320 for now’. NZD dropped to 0.6381 yesterday (15 Jun) before staging a sudden and strong surge. While our 0.6510 ‘strong resistance’ level is still intact, downward pressure has been dented and the odds for NZD to move to 0.6320 have diminished considerably. From here, a break of 0.6510 would indicate that NZD could spend some time trading sideways, To look at it another way, it is premature to expect a resumption of the recent strong advance in NZD.”