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According to FX Strategists at UOB Group, further upside in NZD/USD is likely to meet strong hurdle around the 0.7320 area in the next weeks.

Key Quotes

24-hour view: “Our expectation for NZD to ‘test the major support at 0.7205’ was incorrect as it rose to a high of 0.7282. Despite the advance, upward momentum has barely improved and NZD is unlikely to strengthen much further. For today, NZD is more likely to trade sideways between 0.7240 and 0.7290.”

Next 1-3 weeks: “We highlighted yesterday (31 May, spot at 0.7235) that ‘a breach of 0.7205 would indicate that the current upward pressure has eased’. There is no change in our view for now. While the risk remains on the upside, lackluster momentum suggests that any advance in NZD is likely to struggle to move clearly above 0.7320.”