NZD/USD needs to regain 0.7190 to alleviate negative bias – UOB

According to FX Strategists at UOB Group, only a return above 0.7190 should mitigate the current downside pressure.

Key Quotes

“We highlighted yesterday (24 Apr, 0.7155) that “further weakness towards 0.7100 seems likely” but the continuing rapid pace of decline that quickly hit a low 0.7106 came as a surprise (note that NZD dropped by a whopping -2.8% in the past 4 days)”.

“In view of the strong downward momentum, a break of 0.7100 would not surprise at all but the swift and sharp drop that started last week appears to be running ahead of itself and it is unlikely NZD can maintain the current torrid pace of decline. The next support at 0.7070 could temporarily check the drop in NZD (next support is at 0.7035)”.

“That said, only a move back above the ‘key resistance’ at 0.7190 (level was at 0.7220 yesterday) would indicate that the current weakness has stabilized”.