FX Strategists at UOB Group noted NZD/USD could have reached a near term top in the 0.6790 region.
Key Quotes
24-hour view: “We expected NZD to trade sideways within a 0.6740/0.6780 range yesterday. However, NZD traded in a quiet manner and within a narrower range than expected (0.6757/0.6786). The subsequent daily closing is on the soft side and from here, NZD could drift lower to 0.6740. For now, any down-move is viewed as part of a lower 0.6740/0.6785 range and a sustained decline is not expected”.
Next 1-3 weeks: “Despite overall positive indications, NZD has not been able to capitalize on its strong advance from last week. The relatively rapid retreat from last Friday’s (19 Jul) 0.6789 peak has dented the upward momentum and our view for NZD to “extend its gains to 0.6815″ is likely incorrect. From here, a dip below the 0.6725 ‘key support’ would indicate that 0.6789 is a short-term top and NZD is then likely to trade sideways for period. In order to revive the rapidly waning momentum, NZD has to move and stay above 0.6785 within these 1 to 2 days or the risk of a short-term top would increase quickly”.
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