NZD/USD bearish below 0.7075 – UOB

NZD/USD’s stance should shift to bearish from neutral on a close below 0.7075, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected a lower NZD yesterday, the ease of which the strong 0.7135 support was taken out came as a surprise. The decline appears incomplete and further weakness is expected towards 0.7075 (next support is at 0.7040). On the upside, 0.7155 is expected to be strong enough to contain any intraday rebound (minor resistance is at 0.7135)”.

Next 1-3 weeks: “We have held the same view that the pull-back in NZD “room to extend to 0.7135” since last Wednesday (27 Sep). This level was finally exceeded as NZD dropped to a low of 0.7111 yesterday. While the immediate pressure is still clearly on the downside, we prefer to wait for a daily closing below the 0.7075 support before adopting a bearish stance. This scenario seems likely unless NZD can move and stay above 0.7155 within these 1 to 2 days”.