NZD/USD: A move to 0.5855 can be expected – UOB Group

Further NZD strength is not ruled out, but it may not be able to maintain a foothold above 0.5785. In the longer run, upward momentum has increased, but NZD must first close above 0.5785 before a move to 0.5855 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Upward momentum has increased

24-HOUR VIEW: "The following are the excerpts from our update yesterday: 'provided that NZD holds above 0.5580 (minor support at 0.5620), it could test 0.5695 before the risk of a pullback increases. The major resistance at 0.5760 is not expected to come under threat.' We were correct on the first count, but not the second, as NZD surpassed 0.5760 (high of 0.5764). Further NZD strength is not ruled out, but overbought conditions suggest any advance may not be able to maintain a foothold above 0.5785. The major resistance at 0.5855 is unlikely to come into view. Support levels are at 0.5720 and 0.5690."

1-3 WEEKS VIEW: "We revised our view from negative to neutral yesterday (10 Apr, spot at 0.5650), indicating that 'the recent weakness in NZD 'has stabilised, and NZD is likely to consolidate between 0.5540 and 0.5760 for now.' While NZD subsequently rose above 0.5760, the increase in momentum is not enough to indicate a sustained advance, just yet. NZD must first close above 0.5785 before a move to 0.5855 can be expected. The likelihood of NZD closing above 0.5785 will remain intact as long as 0.5660 is not breached."