FX Strategist at UOB Group noted the Kiwi Dollar is seen sidelined for the time being albeit within a wider range.
Key Quotes
24-hour view: “We expected NZD to “test the strong 0.6580 resistance first before it should ease off”. The expectation did not materialize as NZD eased off directly from a high of 0.6570 and touched an overnight low of 0.6514. The pull-back has scope to extend lower but any further decline is viewed as part of 0.6500/0.6550 range (we do not expect a sustained down-move below 0.6500)”.
Next 1-3 weeks: “NZD hit a high of 0.6572 yesterday before ending the day on a strong note (NY close of 0.6553, +0.47%). The high was not far from the top of our expected 0.6460/0.6580 consolidation range. For now, the risk of a clear break of 0.6580 is not high but after yesterday’s price action, it has clearly improved. In other words, while we continue to expect NZD to trade sideways between 0.6460 and 0.6580, we would not be surprise with a break of 0.6580. Looking ahead, a break of 0.6580 would indicate that NZD is ready to tackle the month-to-date high at 0.6620″.
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