UOB Group’s FX Strategists still see the outlook for NZD/USD tilted towards the neutral stance in the near-term.
Key Quotes
24-hour view: “We highlighted yesterday that ‘there is room for NZD to edge higher to 0.7195 but the next resistance at 0.7220 is not expected to come into the picture’. Our view for a higher NZD was not wrong even though the subsequent NZD strength exceeded our expectation (NZD rose to an overnight high of 0.7218 before edging above 0.7220 during early Asian hours). Upward momentum is beginning to improve and NZD could advance further to 0.7240. For today, NZD is unlikely able to maintain a foothold above this level (next resistance is at 0.7285). Support is at 0.7200 followed by 0.7180.”
Next 1-3 weeks: “Yesterday, we indicated that ‘while the underlying tone has weakened, NZD has to close below 0.7125 before a sustained decline can be expected’. We added, ‘the prospect for such a move is not high but it would remain intact as long as NZD does not move above 0.7240’. NZD subsequently rebounded strongly and closed on a strong note at 0.7217 (+0.95%). The mild downward pressure has eased and NZD is expected to trade between 0.7150 and 0.7285 for now.”
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