NZD/USD risks a potential drop to the 0.6700 level in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that NZD ‘could dip below 0.6770 but is unlikely to threaten the major support at 0.6740’. Our view turned out to be correct as NZD dropped to a low of 0.6745 during late NY hours. While downward momentum has not improved by much, NZD could weaken further. That said, the major support at 0.6700 is unlikely to come into the picture (minor support is at 0.6725). Resistance is at 0.6770 followed by 0.6795.”

Next 1-3 weeks: “We have expected NZD to consolidate and trade between 0.6740 and 0.6900 since last Wednesday (09 Mar, spot at 0.6815). After trading sideways for a few days, NZD dropped to a low of 0.6745 yesterday. Shorter-term downward momentum is beginning to improve and NZD is likely to trade with a downward bias towards 0.6700. A break of 0.6700 would shift the focus to 0.6660. The downward bias is intact as long as NZD does not move above 0.6810 (‘strong resistance’ level).”