NZD/USD: Any advance is unlikely to reach 0.6030 – UOB Group

New Zealand Dollar (NZD) could rise further vs US Dollar (USD), but due to the overbought conditions, any advance is unlikely to reach 0.6030. In the longer run, for a sustained advance, NZD must break and hold above 0.6030, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

For a sustained advance, NZD must break and hold above 0.6030

24-HOUR VIEW: "We did not expect NZD to soar last Friday (we were expecting range trading). The sharp rise appears to be overdone, but there is no sign of a slowdown yet. Today, NZD could rise further, but due to the deeply overbought conditions, any advance is unlikely to reach the major resistance level at 0.6030. There is another resistance level at 0.6010. Support is at 0.5970; a break of 0.5950 would mean that NZD is not advancing further."

1-3 WEEKS VIEW: "In our latest narrative from last Thursday (22 May, spot at 0.5935), we highlighted that 'While the price action over the past couple of days provides no fresh clues, a narrower 0.5865/0.5985 range is likely enough to contain the price movements for now.' Last Friday, NZD surged, rising slightly above 0.5985 (high of 0.5989). NZD closed on a strong at note 0.5986, up by 1.50%. While there has been an increase in momentum, it is not enough to indicate a sustained rise just yet. For a sustained advance, NZD must break and hold above the significant resistance at 0.6030. The chance of a clear breakout will rise in the coming days, provided that the ‘strong support’ level at 0.5920 holds."