FX Strategists at UOB Group Quek Ser Leang and Lee Sue Ann noted NZD/USD risks a probable drop to the 0.6530 region in the next weeks.

Key Quotes

24-hour view: “We highlighted last Friday that NZD could ‘weaken further to 0.6700, possibly 0.6675’. We clearly underestimated the downward momentum as NZD plunged to a low of 0.6627 before extending its decline during Asian hours. From here, NZD could drop below 0.6590. The next support at 0.6530 is unlikely to come under threat. Resistance is at 0.6640 followed by 0.6675.”

Next 1-3 weeks: “Last Friday (22 Apr, spot at 0.6725), we highlighted that downward pressure is building again and that NZD could decline to 0.6675. While our view for NZD to weaken turned out to be correct, we did not expect the rapid manner by which NZD plunged to 0.6627. Downward momentum has improved considerably and NZD could weaken further to 0.6590. A break of this support would shift the focus to the yearto-date low near 0.6530. On the upside, a breach of 0.6715 (‘strong resistance’ level) would indicate that NZD is unlikely to weaken further.”