Following the recent price action, NZD/USD could now attempt to consolidate in the short-term horizon, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our view for NZD yesterday was it “could edge above 0.6375 but the next major resistance at 0.6410 is not expected to come into the picture”. NZD subsequently touched 0.6395 before staging a relatively sharp pull-back. Upward pressure has eased and for today, 0.6410 is still unlikely to come into the picture. From here, the pull-back in NZD could extend lower but any weakness is viewed as a lower 0.6345/0.6390 trading range (a sustained decline is not expected)”.
Next 1-3 weeks: “There is not much to add to the update from Wednesday (04 Sep, spot at 0.6335) wherein NZD is “expected to trade sideways but is likely to test the top of the 0.6290/0.6410 range first”. While NZD rose to 0.6395 yesterday (05 Sep), overbought shorter-term conditions suggest 0.6410 could be out of reach for the next few days. Looking ahead, if NZD were to move clearly above 0.6410, it would suggest a stronger recovery to 0.6450, possibly 0.6500”.
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