In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser at UOB Group, NZD/USD now faces some near-term consolidation.
Key Quotes
24-hour view: Yesterday, we expected NZD to consolidate further in a range of 0.5790/0.5835. However, NZD traded in a higher range of 0.5805/0.5844. Upward momentum has hardly increased. Today, NZD could test 0.5855 before the risk of a pullback increases. The next resistance at 0.5900 is highly unlikely to come into view. Support is at 0.5825, followed by 0.5810.
Next 1-3 weeks: We have expected a lower NZD since early last week. In our latest update from last Friday (27 Oct, spot at 0.5820), we indicated that “while downward momentum has waned somewhat, there is still a chance for NZD to weaken to 0.5730.” Yesterday, NZD rose to a high of 0.5844. While our ‘strong resistance’ level of 0.5855 has not been breached, the weakness in NZD appears to have stabilised. From here, NZD is likely to trade in a range, probably between 0.5775 and 0.5900.
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