According to FX Strategists at UOB Group, NZD/USD still risks further pullbacks in the short-term horizon.

Key Quotes

24-hour view: “We highlighted yesterday that ‘downward pressure is beginning to ease but NZD could dip below 0.6800 first before a more sustained rebound can be expected’. We added, ‘the next major support at 0.6760 is not expected to come into the picture’. Our view was not wrong as NZD dropped to 0.6788 before rebounding. The rebound has scope to extend but is likely limited to a test of 0.6855 (minor resistance is at 0.6840). Support is at 0.6805 followed by 0.6790.”

Next 1-3 weeks: “We have expected NZD to weaken since early last week. In our latest narrative from yesterday (29 Nov, spot at 0.6825), we highlighted that further NZD weakness is not ruled out but the prospect for NZD to weaken to the next major support at 0.6760 is not high. There is no change in our view for now. On the upside, a breach of 0.6895 (no change in ‘strong resistance’ level) would indicate that the weak phase has come to an end.”