NZD/USD could attempt a recovery near term – UOB
FX Strategists at UOB Group expected the Kiwi Dollar to move into a sideline pattern vs. the Greenback.
24-hour view: “We highlighted yesterday “further sustained decline is unlikely” and expected NZD to “trade sideways within a 0.6250/0.6290 range”. NZD subsequently traded between 0.6258 and 0.6299 before ending the day at 0.6291. The current price action is still viewed as part of a consolidation phase and NZD is expected to trade sideways, albeit at a slightly higher range of 0.6275/0.6320 range”.
Next 1-3 weeks: “While we ‘upgraded’ the downside risk in NZD last Friday (20 Sep, spot at 0.6300) and indicated that “the risk of a break 0.6270 has increased”, we did not quite anticipate the subsequent large and rapid drop to 0.6255. From here, NZD is still not out the woods yet but severely oversold conditions suggest odds for further weakness to the next support at 0.6200 are not that high (there is another support at 0.6230). All in, NZD has to move back above 0.6320 (‘strong resistance’ was at 0.6345 last Friday) in order to indicate that the current downward pressure has eased”.