NZD/USD: A move to 0.6870 loses momentum – UOB

In light of UOB Group’s FX Strategists, NZD/USD’s potential drop to the 0.6870 level appears to have lost traction.

Key Quotes
24-hour view: “We expected NZD to ‘trade within a higher range of 0.6945/0.7020’ yesterday. However, it edged to a high of 0.7035 during NY session. Upward momentum has improved a tad and the bias for today is tilted to the upside and NZD could edge above 0.7035. The strong resistance at 0.7050 is unlikely to come under threat. Support is at 0.7000 followed by 0.6980. A break of 0.6980 would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “We have expected a weaker NZD for more than a week now. After NZD plunged to 0.6923 last Friday, we indicated on Monday (21 Jun, spot at 0.6955) that NZD ‘is still weak but the next support at 0.6870 may not come into the picture so soon’. NZD rebounded over the past couple of days and the downward momentum is beginning to wane. The odds for NZD to weaken to 0.6870 have diminished but only a break of 0.7050 (no change in ‘strong resistance’ level) would indicate that the more than one week long weakness in NZD has run its course.”