NZD/USD can rise further – UOB Group
New Zealand Dollar (NZD) could rise further vs US Dollar (USD); overbought conditions suggest the major resistance at 0.5775 is out of reach for now. In the longer run, current price movements are likely part of a recovery phase that could reach 0.5775, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Overbought conditions suggest the major resistance at 0.5775 is out of reach
24-HOUR VIEW: "We noted 'a slight increase in momentum' yesterday, and we expected NZD to 'trade in a higher range of 0.5625/0.5670.' Instead of trading in a range, NZD surged to 0.5731. Although the increase in momentum indicates NZD could rise further, overbought conditions suggest the major resistance at 0.5775 is out of reach for now (there is another resistance at 0.5750). To keep the momentum going, NZD must hold above 0.5675 (minor support at 0.5700)."
1-3 WEEKS VIEW: "We have held a NZD negative view since late last week. Yesterday, 05 Mar, when NZD was at 0.5650, we highlighted that 'slowing momentum indicates that the chance of NZD reaching 0.5565 is slim.' We pointed out, 'a breach of 0.5670 would suggest that NZD has moved into a range trading phase.' NZD not only broke above 0.5670, but it also surged to 0.5731, gaining 1.06% for the day (closing at 0.5726). Instead of range trading, the sharp increase in momentum suggests that the current price movements are likely part of a recovery phase that could reach 0.5775. The recovery will remain intact as long as the ‘strong support’ level, now at 0.5640, is not breached."
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FXStreet Insights Team
FXStreet
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