In view of strategists at UOB Group, NZD/USD is seen extending its consolidative theme for the next 1-3 weeks.
“As noted yesterday, any extension higher in NZD is expected to struggle near the major 0.7045/50 resistance. NZD touched a high of 0.7048 before dropping sharply to hit an overnight low of 0.6959. Despite the sharp decline, the current movement is viewed as part of a broader consolidation phase and further sustained down-move is not expected”.
“While upward momentum has improved, it is too early to expect a sustained up-move as 0.7055 is a very strong resistance and this level is unlikely to yield so easily. Overall, we prefer to hold a neutral stance for now even though the short-term bias is tilted to the upside (as long as 0.6950 is intact)”.