FX Strategists at UOB Group noted the neutral outlook on the Kiwi Dollar and expect the pair to extend the consolidative theme.
Key Quotes
24-hour view: “NZD hit a high of 0.6722 early yesterday morning before easing off quickly. Upward momentum appears to be struggling and 0.6722 is likely a short-term top. That said, it is too soon to expect a significant pullback. NZD is more likely to consolidate its gains and trade sideways at these higher levels, likely between 0.6675 and 0.6715″.
Next 1-3 weeks: “NZD moved above the top of our expected 0.6560/0.6690 consolidation range yesterday (22 Aug) and as it hit a high of 0.6722. Despite the relatively strong up-move over the past few days, we are not convinced that the current strength in NZD is sustainable. The move to 0.6722 is more likely an ‘expansion in range’ and while further NZD strength to 0.6760 is not ruled out, any up-move is viewed as part of a 0.6610/0.6760 consolidation range. In other words, NZD has likely moved into a higher trading range”.
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