NZD/USD upside pressure alleviated below 0.7205 – UOB

According to FX Strategists at UOB Group, the Kiwi Dollar faces a relevant support around the 0.7200 handle in the near term.

Key Quotes

24-hour view: “The sharp rally in NZD came as a surprise. Several strong resistances were taken out with ease as NZD hit a high of 0.7263. While approaching overbought, strong upward momentum suggests that the risk is still on the upside even though the next major resistance at 0.7295/00 could be just out of reach for now. Support is at 0.7230 but the stronger level is closer to 0.7205”.

Next 1-3 weeks: “Our recent bearish expectation was proven wrong as NZD surged suddenly and hit an overnight high of 0.7263. The strong rebound appears to have room to extend to 0.7300, possibly extending further to 0.7335. Only a move back below 0.7205 would indicate that the immediate upward pressure has eased”.

“Positioning wise, those who sold at 0.7205/10 would have incurred a loss of -0.49%”.