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FX Strategists at UOB Group remain neutral on the Kiwi Dollar, although a test of the 0.6900 handle appears out of reach for the time being.

Key Quotes

24-hour view: “We expected a higher NZD yesterday but were of the view that “the next resistance at 0.6860 is unlikely to be challenged”. NZD subsequently hit a high of 0.6843 before ending the day on a solid note (NY close of 0.6835). The strong daily closing suggests that a break above 0.6860 would not be surprising now. 0.6860 is a rather strong resistance and a break of this level could lead to a rapid rise even though 0.6900 is likely out of reach, at least for today. On the downside, we expect yesterday’s low near 0.6785 to be strong enough to hold any intraday pull-back (0.6810 is already quite a strong support)”.

Next 1-3 weeks: “We have held the same view since Monday (23 Jul, spot at 0.6815) wherein we expected “NZD to retest the month-to-date high near 0.6860″. After the strong overnight up-move, this level appears to be within reach. As highlighted previously, a break of this rather strong resistance could trigger a quick rise to the next resistance at 0.6900. On the downside, support levels have moved higher to 0.6810 and 0.6785″.