NZD/USD still looks to extra upside – UOB

The kiwi dollar is expected to appreciate vs. the greenback in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected NZD strengthen yesterday but held the view that ‘major 0.6530 resistance is unlikely to come under threat’. However, NZD rose to a high of 0.6537 before ending the day on a firm note at 0.6510 (+0.51%). While upward momentum has eased somewhat, it is too early to expect a sustained pull-back. For today, NZD is more likely to consolidate and trade sideways at these higher levels, expected to be between 0.6480 and 0.6535.”

Next 1-3 weeks: “We highlighted 2 days ago that NZD ‘could trade between 0.6380 and 0.6530 for a period’. NZD edged above the top of the expected range yesterday (high of 0.6537). Despite the relatively firm daily closing at 0.6510 (+0.51%), momentum has not improved by all that much. That said, NZD is likely to trade with an upside bias but at this stage, the prospect of a break of last month’s 0.6585 peak is not high. Overall, only a breach of 0.6440 (‘strong support’ level) would indicate that the current mild upward pressure has eased.”