NZD/USD: Overbought conditions may limit any gains to a test of 0.5960 – UOB Group
Strong momentum indicates further New Zealand Dollar (NZD) strength; overbought conditions may limit any gains to a test of 0.5960. In the longer run, price action indicates NZD is likely to continue to rise, but it remains to be seen if the major resistance at 0.5990 is within reach, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
NZD is likely to continue to rise
24-HOUR VIEW: "We expected NZD to 'trade in a range between 0.5855 and 0.5915' yesterday. However, NZD rose sharply to a high of 0.5943 before closing on a firm note at 0.5941 (+0.83%). Strong momentum indicates further NZD strength, but overbought conditions may limit gains to a test of 0.5960. The significant resistance level at 0.5990 is unlikely to come into view today. Support is at 0.5925; a breach of 0.5910 would indicate that NZD is not strengthening further."
1-3 WEEKS VIEW: "NZD rose to a high of 0.5917 last Friday. Yesterday, we indicated that 'the increase in upward momentum is not sufficient to indicate a sustained advance just yet.' We also indicated that 'for a continued rise, NZD must first close above 0.5930.' We added, 'the odds of NZD closing above 0.5930 will remain intact as long as it holds above the ‘strong support’ level, which is now at 0.5840.' We did not expect the subsequent strong rise, as NZD rose and closed at 0.5941. The price action indicates NZD is likely to continue to rise, but it remains to be seen if there is sufficient momentum for it to reach the major resistance at 0.5990. On the downside, the ‘strong support’ level is currently at 0.5880 instead of 0.5840."
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FXStreet Insights Team
FXStreet
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