FX Strategists at UOB Group expect the rangebound theme to persist around NZD/USD in the near term.
Key Quotes
24-hour view: “Expectation for NZD to trade sideways yesterday was incorrect as it staged a surprisingly robust up-move to an overnight high of 0.6719. Despite the strong up-move, momentum has not improved by much. That said, NZD could edge above the overnight high but for today, a move beyond the 0.6737 peak seen earlier this week is not expected. Support is at 0.6690 but the stronger level is at 0.6675″.
Next 1-3 weeks: “While the recovery in NZD from the sharp plunge on Monday (01 Jul) was more robust and rapid than expected, we are holding on to our view that NZD is in a sideway-trading range of 0.6610/0.6730 for now. Upward momentum has picked up but NZD has to move and stay above 0.6750 in order to indicate it has moved into a ‘positive phase’. The prospect for such a scenario is not high but it would continue to increase as long as NZD does not move below 0.6650 within the next few days”.
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