NZD/USD: Further upside is expected above 0.6735 – UOB

NZD/USD needs to clear 0.6735 to allow for extra gains in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we expected NZD to ‘consolidate and trade between 0.6670 and 0.6720’. However, NZD rose to 0.6735 before easing off to close little changed at 0.6701 (+0.08%). We expect NZD to trade sideways for today, likely between 0.6680 and 0.6725.”

Next 1-3 weeks: “Last Thursday (17 Feb, spot at 0.6690), we highlighted that risk has shifted to the upside and NZD could strengthen to 0.6735. NZD subsequently rose to 0.6730 before pulling back. Yesterday (21 Feb, spot at 0.6685), we highlighted while upward momentum has waned somewhat, there is still chance for AUD to push higher to 0.6735. NZD subsequently popped to a high of 0.6735 during early NY session before easing off. Despite the advance, upward momentum has not improved by much. 0.6735 is a solid resistance level and NZD has to close above this level before further advance is likely. On the downside, a breach of 0.6660 (‘strong support’ level was at 0.6645 yesterday) would indicate that the current upward pressure has eased.”