NZD/USD: Further range bound in the pipeline – UOB

NZD/USD is now seen moving within the 0.6740-0.6845 range in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected NZD to ‘consolidate and trade within a range of 0.6820/0.6860’ yesterday. However, NZD plummeted to 0.6775 before closing on a weak note at 0.6788 (-0.83%). While oversold, strong downward momentum indicates that NZD could weaken further. That said, in view of the oversold conditions, any weakness is likely limited to a test of 0.6770. On the upside, a breach of 0.6815 would indicate that the current weakness has stabilized.”

Next 1-3 weeks: “Yesterday (03 Jan, spot at 0.6845), we highlighted that there is room for NZD to edge higher to 0.6885. We added, a breach of 0.6780 would indicate that the mild upward pressure has eased. We did not expect the subsequent sharp sell-off as NZD breached the ‘strong support’ level (low of 0.6775). Upward pressure has eased and NZD has likely moved into a consolidation phase. From here, NZD could trade within a 0.6740/0.6845 range.”