In opinion of FX Strategists at UOB Group, NZD/USD could retake the 0.7100 level in the next weeks.
24-hour view: “We expected NZD to strengthen yesterday but we were of the view that ‘the next resistance at 0.7065 is not expected to come under threat’. However, NZD edged above 0.7065 (high of 0.7070) before closing on a firm note at 0.7060 (+0.62%). The swift and sharp rise appears to be overdone but the advance in NZD has room to extend. However, a clear break of 0.7100 is unlikely for now. On the downside, a break of 0.7030 would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “Yesterday, we held the view that NZD ‘is in a consolidation and could trade between 0.6960 and 0.7100 for a period of time’. However, we did not quite anticipate the strong bounce to 0.7070. Upward momentum is beginning to improve and the risk of a break of 0.7100 has increased. A clear break of this level would shift the focus to 0.7125. On the downside, a breach of 0.7000 would indicate that NZD is not ready to move above 0.7100.”
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