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NZD/USD could move into a consolidative phase ahead of extra upside in the next weeks, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected NZD to strengthen yesterday but we held the view that ‘0.6830 is likely out of reach’. However, NZD soared to a high of 0.6854 before retreating quickly. While the advance is overbought, the firm underlying tone suggests it is too early to expect a sustained pull-back. From here, NZD is likely to consolidate and trade sideways at these higher levels, expected to be within a 0.6790/0.6855 range.”

Next 1-3 weeks: “We highlighted last Friday (06 Nov, spot at 0.6765) that ‘risk of a break of 0.6800 has increased’. We added, ‘if NZD can close above this level, it could advance further to 0.6830, possibly 0.6880’. NZD rose to a high of 0.6854 yesterday (09 Nov) before closing on a firm note at 0.6817 (+0.65%). While the next level to focus on is at 0.6880, overbought shorter-term conditions could lead to a few days of consolidation first. Overall, only a break of 0.6740 (‘strong support’ level previously at 0.6710) would indicate that the risk for further NZD strength has dissipated.”