NZD/USD’s stance remains constructive and could attempt a test of the 0.6450/0.6500 area in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we held the view that NZD ‘could move nearer to 0.6450 first before easing off’. Our expectation was not wrong as NZD eased off after touching 0.6444. While it is likely too early to expect a significant pull-back, upward momentum is showing sign of tiring and further sustained NZD is unlikely. NZD is more likely to consolidate and trade sideways for today, expected to be between 0.6370 and 0.6450.”
Next 1-3 weeks: “We highlighted yesterday that the positive phase in NZD is still intact and noted that the ‘next resistance above 0.6300 is at 0.6350’. NZD surged past the two resistance levels with nary a glance extended its gain this morning. The super-charged momentum could continue to ‘overcome’ the overbought conditions. In other words, there is no change to the positive outlook for NZD. The next level to focus on is at 0.6450 followed by 0.6500. On the downside, the ‘strong support’ level has moved higher to 0.6290 from 0.6200.”
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