NZD/USD back to neutral stance, could test 0.7050 – UOB

In view of the research team at UOB Group, the Kiwi dollar keeps its neutral stance intact although it could slip to the mid-0.70s vs. the dollar in the next 1-3 week.

Key Quotes

“NZD extended its decline early this morning by taking out last Friday’s low of 0.7122. The down-move appears to have scope to extend further to test the strong support at 0.7090”.

“While we highlighted the increasing risk of a short-term top last Friday, the sharp and rapid drop that took out the stop loss at 0.7120 earlier this morning was unexpected (suggested profit-taking level of 0.7290 was not met)”.

‘The bullish outlook has shifted to neutral but the current pull-back appears to have scope to extend lower to 0.7050. Overall, NZD is expected to stay under pressure in the next few days unless it can move back above 0.7210”.