According to FX Strategists at UOB Group, the downside in NZD/USD could extend to the 0.6850 area in the next weeks.

Key Quotes

24-hour view: “Our expectations for NZD to ‘trade sideways’ yesterday were incorrect as it dropped sharply to 0.6890 before closing on a weak note at 0.6897 (-0.70%). Further weakness appears likely but oversold conditions suggest the major support at 0.6850 is likely out of reach for now (there is another support at 0.6875). Resistance is at 0.6915 followed by 0.6930.”

Next 1-3 weeks: “On 17 Mar (spot at 0.6835), we highlighted that the risk for NZD has shifted to the upside. As NZD rose, in our latest narrative from yesterday (28 Mar, spot at 0.6960), we indicated that upward momentum is beginning to wane and the odds for NZD to advance to 0.7025 has diminished. NZD subsequently cracked our ‘strong support’ level at 0.6925. The break of the ‘strong support’ indicates that NZD strength has run its course. At this stage, we view the current movement as part of a pullback that could extend to 0.6850. Only a breach of 0.6960 (‘strong resistance’ level) would indicate that NZD is not ready to pullback to 0.6850.”