NZD/USD likely supported at 0.7200 – UOB

The research team at UOB Group suggested the Kiwi dollar could find strong support in the 0.7200 area in the next 1-3 weeks.

Key Quotes

“The sharp drop yesterday took out the major 0.7250 support to touch a low of 0.7235. Further NZD weakness still seems likely but oversold conditions would likely slow the pace of decline and limit the down-move to 0.7200/05 (low in late August)”.

“While we anticipated a deeper pull-back to 0.7250, the rapid pace of the decline was unexpected (overnight low of 0.7235)”.

“The neutral outlook has shifted to bearish but in view of the sharp drop over the past few trading days, any further down-move is expected to encounter solid support at 0.7200/05, the low in late August. Overall, only a move above 0.7340 would indicate that the current bearish phase in NZD has ended”.