NZD/USD: Likely to rise further – UOB Group

New Zealand Dollar (NZD) is likely to rise further; it is unlikely to be able to break clearly above 0.5965. In the longer run, outlook is mixed; NZD is expected to trade in a 0.5835/0.6030 range, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

NZD is expected to trade in a 0.5835/0.6030 range

24-HOUR VIEW: "The following are excerpts from our update yesterday: 'Despite dropping sharply to 0.5847 yesterday, downward momentum has not increased significantly. However, the risk for NZD is on the downside, but any further decline is likely part of a lower range of 0.5835/0.5900.' NZD then dipped 0.5848 before surging, reaching a high of 0.5942. The rapid rise is overbought, but with no signs of exhaustion just yet, NZD could rise further today. However, conditions are deeply overbought, and NZD is unlikely to be able to break above 0.5965. Support levels are at 0.5910 and 0.5885."

1-3 WEEKS VIEW: "Last Friday (09 May, spot at 0.5900), we highlighted the following: 'There has been a slight increase in momentum, indicating the bias for NZD is tilted to the downside toward 0.5870, potentially reaching 0.5835. The downward bias will remain intact provided that the ‘strong resistance’ level, currently at 0.5960, is not breached.' Yesterday (13 May, spot at 0.5860), we indicated that 'although downward momentum has not increased much further, the chance of NZD reaching 0.5835 has increased.' We did not expect NZD to then soar above our ‘strong resistance’ level of 0.5940 (high was 0.5942). The buildup in momentum has fizzled out. The recent price movements have resulted in a mixed outlook. For the time being, we expect NZD to trade in a 0.5835/0.6030 range."