FX Strategists at UOB Group shifted their stance on the Kiwi Dollar to neutral from bearish, noting there is room for a test of the 0.72 handle in the near term.
24-hour view: “Expectation for NZD to trade sideways was wrong as this pair rose to hit a high of 0.7146. Despite the pull-back from the high, the undertone is still firm and a move towards 0.7160 seems likely. On the downside, 0.7100 is a strong support but only a move back below 0.7080 would indicate that the current upward pressure has eased”.
Next 1-3 weeks: “Our recent bearish expectation was proven wrong quickly as NZD rose above the 0.7140 stop-loss (overnight high of 0.7146). While the outlook for this pair is deemed as neutral now, the current rebound has room to extend higher to 0.7200. At this stage, a sustained move above this level seems unlikely. On the downside, only a move back below 0.7065 would indicate that the current mild upward pressure has eased”.
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