NZD/USD is seen extending the sideline theme in the next weeks, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that “the recovery in NZD has scope to test 0.6370″. We added, “the next resistance at 0.6385 is unlikely to come into the picture”. NZD briefly popped to a high of 0.6375 before easing off to trade sideways for the rest of the sessions. Momentum indicators have turned neutral and the current movement is viewed as part of a consolidation phase. In other words, NZD is expected to trade sideways for today, likely between 0.6335 and 0.6375″.
Next 1-3 weeks: “We indicated in our last update on 23 Oct (spot at 0.6405) that “NZD has to crack the strong 0.6450 level within these few days or the risk of a top would increase quickly”. The subsequent breach of the ‘strong support’ level suggests that last week’s 0.6436 peak is a short-term top (we previously expected a move to 0.6450). The current movement is viewed as an on-going consolidation phase and NZD is expected to trade sideways between 0.6300 and 0.6410 for now”.
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