NZD/USD stays underpinned above 0.7265 – UOB

FX Strategists at UOB Group keeps the constructive view on the Kiwi Dollar as long as 0.7265 holds.

Key Quotes

24-hour view: “In line with expectation, NZD traded sideways yesterday albeit at a narrower range than anticipated. However, the rapid drop after NY close has shifted the pressure to the downside and a probe of the strong 0.7290 support seems likely (next support at 0.7265 is unlikely to come into the picture). On the upside, the major 0.7355/60 resistance is expected to be strong enough to cap any intraday rebound”.

Next 1-3 weeks: “We have held the same view since last Wednesday (07 Mar, spot at 0.7290) that the rebound in NZD “has scope to extend higher towards 0.7350”. This strong resistance was finally tested as NZD hit an overnight high of 0.7355. While the odds for a sustained move above this level are not high, we expect NZD to remain underpinned unless there is break back below 0.7265 (key support previously at 0.7220). In the event of a clear break above 0.7350, the focus would shift to 0.7400. At this stage, we do not expect last month’s 0.7437 top to be challenged”.