The breakdown of 0.6580 could motivate NZD/USD to slip back to the 0.6550 level in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that NZD ‘could dip below 0.6620’. We added, ‘the major support at 0.6580 is not expected to come under threat’. Our view was not wrong as NZD dropped to 0.6593 during early London hours before trading mostly sideways. Downward pressure has waned and NZD is unlikely to weaken much further. For today, NZD is likely to trade sideways, expected to be between 0.6590 and 0.6650.”

Next 1-3 weeks: “Our latest narrative was from last Friday (11 Feb, spot at 0.6655) where we expect NZD to trade between 0.6580 and 0.6720. NZD dropped to a low of 0.6593 yesterday (14 Feb) and the underlying tone has softened somewhat. From here, a break of 0.6580 could trigger a decline to 0.6550. At this stage, the chance for a break of 0.6580 are not high but it would remain intact as long as NZD does not move above 0.6690 (‘strong resistance’ level) within these few days.”