NZD/USD: Further gains seen above 0.5880 – UOB

Further advance in NZD/USD needs to clear the 0.5880 barrier in the near term, noted Market Strategist at UOB Group Quek Ser Leang and Economist Lee Sue Ann.

Key Quotes

24-hour view: “Our expectation for NZD to ‘trade between 0.5715 and 0.5785’ yesterday was incorrect as it lifted off and surged to a high of 0.5844. While overbought, the rapid rise has room to extend but a sustained rise above 0.5880 is unlikely. Support is at 0.5800, followed by 0.5770.”

Next 1-3 weeks: “On Tuesday (25 Oct, spot at 0.5710), we held the view that NZD is likely to ‘consolidate and trade between 0.5590 and 0.5810 for the time being’. Yesterday (26 Oct), NZD rose above 0.5810 and soared to a high of 0.5844. Despite the rapid rise, upward momentum has not improved by much. That said, NZD could rise but it has to close above 0.5880 before further sustained advance is likely. Looking ahead, the next resistance is at 0.5920. Support is at 0.5770, but only a break of 0.5740 would indicate that NZD is not strengthening further.”