No signs of stabilization around NZD/USD yet – UOB

FX Strategists at UOB Group noted the bearish outlook stays intact around the pair, without any sign of stabilization in the near term.

Key Quotes

24-hour view: “While the sharp decline in NZD that started late last week is clearly oversold, there is no sign of stabilization just yet. That said, in view of the oversold conditions, any further weakness is expected to be at a slower pace and could be limited to 0.6905/10. On the upside, only a move back above 0.7000 would indicate that the current weakness has stabilized (0.6975 is acting as a minor resistance)”.

Next 1-3 weeks: “The sharp decline in NZD that started late last week took out several strong supports. While the down-move appears to be overextended, there is no sign of stabilization just yet. From here, barring a move back above 0.7040, further weakness towards 0.6860 would not be surprising. The next support below 0.6860 is at the year-to-date low near 0.6820”.