NZD/USD: Likely to test 0.5800 before pulling back – UOB Group

FXStreet Insights Team FXStreet

There is scope for New Zealand Dollar (NZD) to test 0.5800 before the risk of a pullback increases. In the longer run, the price action continues to suggest a higher NZD; the levels to watch are 0.5800 and 0.5835, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Price action continues to suggest a higher NZD

24-HOUR VIEW: "We expected NZD to 'trade between 0.5745 and 0.5775' last Friday. However, NZD rose to a high of 0.5787. Despite advancing, NZD has not gained much momentum. That said, there is scope for NZD to test 0.5800 before the risk of a pullback increases. On the downside, support levels are at 0.5765 and 0.5755."

1-3 WEEKS VIEW: "We have expected a higher NZD since late last month. In our most recent narrative from last Thursday (05 Dec, spot at 0.5760), we stated that 'the price action continues to suggest a higher NZD'. We pointed out that 'the levels to watch are 0.5800 and 0.5835'. We will maintain the same view as long as 0.5735 (‘strong support’ level was previously at 0.5725) is not breached."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.