NZD/USD: NZD must break and hold above 0.6030 to advance – UOB Group

Conditions remain overbought; instead of rising, New Zealand Dollar (NZD) is more likely to trade in a range between 0.5960 and 0.6020 vs US Dollar (USD). In the longer run, for a sustained advance, NZD must break and hold above 0.6030, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Conditions remain overbought

24-HOUR VIEW: "While we expected NZD to 'rise further' yesterday, we noted that 'due to the deeply overbought conditions, any advance is unlikely to reach the major resistance level at 0.6030.' However, NZD tested the 0.6030 level, touching 0.6031 before easing. Given the still overbought conditions, NZD is unlikely to rise further. Today, NZD is more likely to trade in a range, probably between 0.5960 and 0.6020."

1-3 WEEKS VIEW: "Yesterday, 26 May, when NZD was at 0.5990, we noted that 'While there has been an increase in momentum, it is not enough to indicate a sustained rise just yet.' We added, 'for a sustained advance, NZD must break and hold above the significant resistance at 0.6030.' NZD subsequently rose to 0.6031 before easing. The condition for a decisive break above 0.6030 is not met. However, the likelihood of NZD breaking clearly above 0.6030 will remain intact as long as 0.5920 (no change in ‘strong support’ level) holds."