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NZD/USD is seen extending the upside momentum above the 0.6720 level in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hou view: “We highlighted yesterday that ‘while upward momentum remains lackluster, further NZD strength is not ruled out’. We added, ‘the resistance at 0.6720 is unlikely to come under threat’. Our expectation did not materialize as NZD traded in a quiet manner between 0.6670 and 0.6697. Momentum indicators are mostly ‘neutral’ now and further consolidation would not be surprising. Expected range for today, 0.6660/0.6705.”

Next 1-3 weeks: “Last Thursday (22 Oct, spot at 0.6645), we indicated that NZD ‘is likely to trade within a 0.6560/0.6700 range for now’. We added, ‘the upside appears to be more ‘vulnerable’ but NZD has to close above 0.6720 before a sustained advance can be expected’. While upward momentum has improved, it is not strong for now and NZD has to surmount the 0.6720 level before further gains can be expected. At this stage, the prospect for such a move is not high but it would increase further as long as NZD does not move below 0.6620 within these few days.”