NZD/USD is expected to pick up extra steam in the near term and re-test the 0.6375 area, suggested FX Strategists at UOB Group.
24-hour view: “Instead of “trading sideways”, NZD dropped to 0.6281 before recovering. While upward momentum has not improved by much, the rebound has room to test the 0.6325 resistance. For today, last week’s peak near 0.6355 is not expected to come into the picture. On the downside, support is at 0.6285 followed by the strong level near 0.6270”.
Next 1-3 weeks: “Despite the relatively sharp decline (NY close of 0.6300, -0.64%), our ‘strong support’ level at 0.6270 is still intact (low of 0.6281). For now, we are holding on to our view from yesterday (14 Oct, spot at 0.6330) wherein “there is scope for NZD to edge higher to 0.6375”. In order to reinvigorate the current flagging momentum, NZD has to move clear above 0.6355 within these few days or a break of 0.6270 would suggest the current upward pressure has eased”.
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