NZD/USD: Only above 0.5650 a move to 0.5695 is likely – UOB Group

New Zealand Dollar (NZD) is expected to trade in a sideways range of 0.5600/0.5650. In the longer run, NZD must break and remain above 0.5650 before a move to 0.5695 is likely, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.  

NZD is expected to trade in a sideways range

24-HOUR VIEW: “We expected NZD to ‘trade in a 0.5570/0.5635 range’ yesterday. Our view was incorrect, as NZD soared to 0.5651. However, the advance was brief, as NZD fell quickly from the high to close at 0.5616 (+0.21%). As there has been no significant increase in upward momentum, NZD is unlikely to advance much further. Today, we expect it to trade in a sideways range of 0.5600/0.5650.”

1-3 WEEKS VIEW: “Our latest narrative was from Tuesday (14 Jan, spot at 0.5590), wherein ‘the recent whippy price action has resulted in a mixed outlook.’ We indicated that ‘for the time being, NZD could trade in a sideways range of 0.5540/0.5650.’ Yesterday, NZD rose and tested the upper bound of our expected range, reaching a high of 0.5651. It then pulled back to close at 0.5616, up by 0.21% for the day. Although there has been a slight increase in momentum, NZD must break and remain above 0.5650 before a move to 0.5695 is likely. The likelihood of NZD breaking clearly will increase in the next few days, provided that it remains above 0.5580 (‘strong support’ level).”