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In opinion of FX Strategists at UOB Group, the outlook on NZD/USD remains positive and could face the next resistance in the 0.6300/50 band in the next weeks.

Key Quotes

24-hour view: “We expected NZD to move higher yesterday but we were of the view that ‘0.6260 is likely out of reach’. However, NZD surged to a high of 0.6299 before ending the day sharply higher at 0.6294 (+1.42%). While further gain is not ruled out, severely overbought conditions could ‘limit’ any advance to 0.6320. The next resistance is at 0.6350. Support is at 0.6245 followed by 0.6215.”

Next 1-3 weeks: “While we indicated yesterday (01 Jun, spot at 0.6220) that the ‘positive phase in NZD appears to be ready for the next leg higher towards 0.6300’, we did quite anticipate NZD to come within 1 pip of 0.6300 in less than 24 hours (NZD touched an overnight high of 0.6299). Such strong gain in a short period is not common and could either lead to further strong advance or signal a ‘blow-off’ top. At this stage, the odds for further strong advance are higher. The next resistance above 0.6300 is at 0.6350. All in, the positive phase in AUD that started about 2 weeks ago is deemed as intact until 0.6200 is breached (‘strong support’ level was at 0.6145 yesterday).”