The outlook on the pair remains neutral in the short-term horizon, while further consolidation is also likely, noted FX Strategists at UOB Group.
24-hour view: “NZD did not test the 0.6430 support (as expected yesterday) but rebounded strongly and closed on a strong note (NY close of 0.6527, +1.21%). Upward momentum has picked up quickly and strongly and the current up-move is expected to advance further. That said, the major 0.6560 resistance could be just out of reach for now. Support is at 0.6505 followed by 0.6485”.
Next 1-3 weeks: “Despite the strong surge in NZD yesterday (NY close of 0.6527, +1.20%), we continue to view the current movement as part of a consolidation phase. In other words, NZD is expected to trade sideways within the 0.6430/0.6560 range indicated on Wednesday (10 Oct, spot at 0.6480). That said, after the sharp bounce yesterday, the prospect for a break above 0.6560 has increased but the next resistance at 0.6600 is likely strong enough to thwart any further advance in NZD (at least for another one week or so)”.