NZD/USD now targets 0.7150 – UOB

FX Strategists at UOB Group expect the Kiwi Dollar could depreciate towards the mid-0.7100s in the next 1-3 weeks.

Key Quotes

“While we highlighted yesterday (23 Aug) that a break of the 0.7235/40 support would indicate a move below 0.7202 has started, the pace of the decline was surprising as NZD hit a low of 0.7198 before ending the day lower by -0.76%”.

“As highlighted, 0.7235/40 looks like the neck-line of a ‘head & shoulder’ formation and this pattern suggests that the current weakness could potentially move to 0.6900 in the coming weeks”.

“We prefer not to get carried away and have an immediate target of 0.7150. Those looking to sell could use the current spot level of 0.7235 as an entry level. Resistance is at 0.7255 but only a move above 0.7295 (stop-loss) would indicate that our bearish expectation is wrong”.