NZD/USD: Further retracement should meet support at 0.5535 – UOB

Extra weakness in NZD/USD is expected to face a solid contention at 0.5535 in the near term, suggest UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: “NZD traded sideways within a range of 0.5561/0.5626 yesterday before closing at 0.5608 (+0.46%). The underlying tone has firmed somewhat and NZD could edge higher. However, any advance is unlikely to break the resistance at 0.5660. Support is at 0.5585 but only a breach of 0.5560 would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “Despite dropping to a fresh year’s low of 0.5561 earlier this week, downward momentum is not strong. However, as long as the ‘strong resistance’ at 0.5700 is not breached, NZD could weaken further. That said, any further decline is expected to face solid support at 0.5535. To look at it another way, NZD has to break clearly below 0.5535 before further sustained weakness is likely.”