The upside momentum in NZD/USD remains well in place with the next hurdle emerging at the 0.7060 level in the near-term, noted FX Strategists at UOB Group.
24-hour view: “Yesterday, we highlighted that ‘the advance appears to be overdone and further sustained NZD strength is unlikely’. We added, ‘there is scope for NZD to edge upwards but any advance is viewed as a higher trading range of 0.6950/0.7010 (a sustained rise above 0.7010 is not expected)’. NZD subsequently rose to a high of 0.7015 before settling on a firm note at 0.7007 (+0.40%). Upward momentum is building up again and NZD is likely to advance towards 0.7035. The next resistance at 0.7060 is unlikely to come into the picture. Support is at 0.6975 followed by 0.6950.”
Next 1-3 weeks: “No change in view from yesterday, see reproduced update below. We have held a positive view in NZD since early this month. In our latest narrative on Monday (23 Nov, spot at 0.6945), we held the view that NZD ‘has likely embarked on the next leg higher to 0.6970 (next resistance is at 0.7000)’. Our view was not wrong as NZD soared to a high of 0.7005 yesterday. While further NZD strength is not ruled out, overbought shorter-term conditions could lead to a couple of days of consolidation first and the next major resistance at 0.7060 may not come into the picture so soon. All in, the current positive outlook for NZD is deemed as intact as long as it does not below 0.6920 (‘strong support’ level previously at 0.6880).”