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  • NZD/USD bounces at 0.6670 to hit fresh monthly highs at 0.6720.
  • The kiwi resumes its uptrend as the USD loses momentum.
  • NZD/USD: Breach of 0.6720 might accelerate the uptrend – UOB.

New Zealand dollar has rallied against on Tuesday, following a slight pullback on Monday. The kiwi bounced up from 0.6670 support area to break beyond the top of the last five weeks’ trading range and hit fresh highs at 0.6720 so far.

The kiwi strengthens again as the USD steps back

NZD/USD resumed the upside path on Tuesday with the US dollar pulling back moderately after the strong recovery performed on Monday. The USD Index is trading 0.25% lower, with the investors growing more cautious, reluctant to place long-term bets as coronavirus cases surge in the US and Europe only one week before the US presidential elections.

On the macroeconomic front, the New Zealand trade surplus widened in September, with exports dropping to 4.01B. NZD from 4.412B. NZD and imports increasing to 5.02B. NZD from 4.69B NZD. 

NZD/USD: upside might accelerate above 0.6720 – UOB

On the technical front, the FX strategy team at UOB sees the pair accelerating its uptrend above 0.6720: “the upside appears to be more ‘vulnerable’ but NZD has to close above 0.6720 before a sustained advance can be expected’. While upward momentum has improved, it is not strong for now and NZD has to surmount the 0.6720 level before further gains can be expected. At this stage, the prospect for such a move is not high but it would increase further as long as NZD does not move below 0.6620 within these few days.”

Technical levels to watch