Recovery in NZD/USD could be losing momentum – UOB

In opinion of FX Strategists at UOB Group, odds for a moderate rebound in NZD/USD appear to have run out of steam as of late.

Key Quotes

24-hour view: “Expectation for NZD to “edge lower” was incorrect as it rose to a high of 0.6334. While the advance lacks momentum, there is room for NZD to test the strong 0.6350 resistance level. For today, the prospect for a clear break of this level is not high. Support is at 0.6300 followed by 0.6280″.

Next 1-3 weeks: “NZD spent another day ‘going nowhere’ as it traded within a narrow range and ended the day little changed at 0.6291 (-0.06%). Our expectation (from last Friday, 04 Oct, spot at 0.6300) for a “strong and sustained recovery” has not materialize and the prospect for such a scenario has diminished. Unless NZD can move and stay above 0.6325 within these 1 to 2 days, the current price action appears to be more akin to a ‘consolidation phase’ instead of a ‘strong recovery”. From here, a dip below 0.6270 is enough to indicate that NZD could trade sideways within a 0.6255/0.6350 range for a period”.