UOB discusses the technical outlook for NZD/USD and flags a scope for a slight decline in the near-term with a close below 0.6660 confirming.
"The initial pull-back from the early January peak of 0.6755 was modest but at the last week of January, NZD/USD suddenly lurched lower and appears poised to register the largest 1-week drop in 4 months. The price action suggests that the 3-month rally from last October’s low of 0.6204 has topped out at 0.6755. The current movement is viewed as a correction phase that could last for a couple of months," UOB notes.
"The near-term bias is for a deeper pull-back but at this stage any weakness is viewed as part of a broad 0.6400/0.6700 range (a sustained decline below 0.6400 is unlikely). NZD has to close below the solid 0.6460 support before further weakness can be expected”. On the upside, NZD has to move above 0.6520 (no change in ‘strong resistance’ level) in order to indicate that the current weakness has stabilized," UOB adds.