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NZD/USD is now expected to navigate the 0.7140-0.7270 range in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we noted yesterday that NZD ‘is unlikely to weaken much further’, we expected it to ‘trade between 0.7150 and 0.7200’. We did not anticipate the advance to an overnight high of 0.7219. Upward momentum has improved a tad and NZD could edge upwards the major resistance at 0.7230. For today, a sustained rise above this level is unlikely. On the downside, 0.7170 is expected to be strong enough to hold any pullback for today (minor support is at 0.7190).”

Next 1-3 weeks: “Our latest narrative was from last Thursday (20 May, spot at 0.7175) where we indicated that NZD is under mild downward pressure and could edge lower to 0.7125. Since then, NZD has not been able to make any headway on the downside. The mild downward pressure has dissipated and the current movement is viewed as part of a consolidation phase. From here, NZD is expected to trade within a 0.7140/0.7270 range for a period of time.”