Further downside in NZD/USD could visit 0.5400 – UOB

In opinion of FX Strategists at UOB Group, NZD/USD remains under pressure and a move to the 0.5400 area still looks well on the cards.

Key Quotes

24-hour view: “We expected ‘further rapid drop to 0.5500’ yesterday. The subsequent decline exceeded our expectation NZD plunged to 0.5469 before snapping higher. The strong bounce from the low amid sign of ‘tiring’ momentum suggests NZD is not likely to move below 0.5469 for today. Overall, NZD could continue to trade choppily but is likely to stay within yesterday’s broad range of 0.5469/0.5919.”

Next 1-3 weeks: “NZD cracked the 0.5800 level first indicated on Monday (16 Mar, spot at 0.6050) and plunged to 0.5703. The risk from here is obviously for further NZD decline. The next support is at 0.5400 followed by 0.4895 (low in 2009). ‘Strong resistance’ is at 0.5950.”