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Further upside in NZD/USD is not ruled out, although a convincing move above 0.6660 remains unlikely in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view for NZD yesterday was ‘here is scope for NZD to edge above the strong resistance at 0.6620’ but ‘the next resistance at 0.6660 is unlikely to be challenged’. Our expectation was not wrong as NZD topped at 0.6652 before dropping sharply during NY hours. The sharp drop appears to be running ahead of itself and further sustained weakness in NZD is unlikely. For today, NZD is more likely to consolidate and trade between 0.6540 and 0.6590.”

Next 1-3 weeks: “We noted yesterday (18 Aug, spot at 0.6560) that ‘the mild downward pressure has eased but it is too early to expect a sustained rebound and we expected NZD to “onsolidate and trade between 0.6500 and 0.6620 for a while’. NZD subsequently popped to a high of 0.6609 before closing on a strong note at 0.6601 (+0.67%). While NZD has not moved above the top of our expected range, upward momentum has improved and NZD could edge higher towards 0.6660. At this stage, the prospect for a sustained advance above 0.6660 is not high. On the downside, a breach 0.6525 would indicate the current mild upward pressure has eased.”