In opinion of FX Strategists at UOB Group, NZD/USD now looks to a potential move to the 0.7500 area in the short-term horizon.
Key Quotes
24-hour view: “Yesterday, we highlighted that ‘the rapid and sharp rise appears to be overdone and while NZD could test 0.7400, a sustained rise above this level is unlikely’. We did not anticipate the ease by which NZD accelerated higher to 0.7455. The rally is deep in overbought territory and while a test of 0.7470 is not ruled out, the next resistance at 0.7500 is unlikely to come into the picture. Support is at 0.7400 followed by 0.7370.”
Next 1-3 weeks: “While we turned positive NZD on Monday (22 Feb, spot at 0.7320), the rapid pace of advance has come as a surprise. We noted yesterday (24 Feb, spot at 0.7365) that NZD ‘could rise to 0.7430 next’ but did not quite anticipate the rapid manner by which it surged to 0.7455. While the rally is overbought, robust momentum could lead to further NZD strength. The next resistance is at 0.7500. On the downside, a break of 0.7330 (‘strong support’ level previously at 0.7270) would indicate that the current strong phase has run its course.
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