The probability of NZD/USD to break below 0.7250 remains on the rise, according to FX Strategists at UOB Group.
24-hour view: “We expected NZD to strengthen yesterday but we were of the view that ‘overbought conditions suggest any advance is unlikely to threaten last week’s peak at 0.7246’. We added, ‘0.7225 is already quite a strong level’. NZD eased off after touching 0.7225 but has since rebounded from the overnight low of 0.7185. Upward momentum is beginning to improve and the bias is tilted to the upside. That said, the major resistance at 0.7250 is likely out of reach. Support is at 0.7200 followed by 0.7185.”
Next 1-3 weeks: “We have held the same view since Monday (01 Feb, spot at 0.7175) where we expected NZD to ‘trade between 0.7100 and 0.7250 for a period of time’. However, shorter-term momentum is beginning to improve and the odds for a break of 0.7250 have increased. Looking ahead, if NZD closes above 0.7250, it could advance towards last month’s peak near 0.7315. At this stage, the prospect for such is scenario is not high but it would remain intact as long as NZD does not move below 0.7150 within these few days.”