NZD/USD: Expected to trade in a range between 0.6065 and 0.611 – UOB Group

New Zealand Dollar (NZD) is expected to trade in a range between 0.6065 and 0.6115 against US Dollar (USD). In the longer run, upward momentum has largely faded; NZD is likely to trade in a range between 0.6035 and 0.6130, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Upward momentum has largely faded

24-HOUR VIEW: "NZD rose to 0.6120 two days ago and then pulled back. Yesterday, when NZD was at 0.6100, we highlighted the following: 'Conditions remain overbought. This, combined with slowing momentum, suggests NZD is likely to trade in a range today, most likely between 0.6075 and 0.6120.' We did not expect NZD to drop to a low of 0.6051. NZD rebounded from the low to close slightly lower at 0.6089 (-0.15%). The decline did not lead to a clear increase in downward momentum. Today, we continue to expect NZD to trade in a range, most likely between 0.6065 and 0.6115."

1-3 WEEKS VIEW: "After NZD reached our previous technical target of 0.6120, we indicated yesterday (02 Jul, spot at 0.6100) that 'while NZD may continue to rise, it must break and hold above 0.6120 before a move to 0.6145 can be expected.' We added, 'should NZD break below 0.6055 (‘strong support’ level), it would mean that the NZD strength from late last week has run its course.' NZD subsequently fell to a low of 0.6051. While our ‘strong support’ level was only slightly breached, upward momentum has largely faded. For the time being, it is too early to expect a sizeable pullback. From here, NZD is likely to trade in a range between 0.6035 and 0.6130."