FX Strategists at UOB Group expect the Kiwi Dollar to remain sidelined in the next weeks.
Key Quotes
24-hour view: “Instead of trading sideways (as expected last Friday), NZD surged to hit a high of 0.6920. The up-move appears to have scope to test the major 0.6945 resistance but a sustained move above this level is not expected (next resistance is at 0.6975). On the downside, only a move back below 0.6860 would indicate that the current mild upward pressure has eased (minor support at 0.6890)”.
Next 1-3 weeks: “Despite the sharp decline in NZD for most of last week, we held the view that only a “NY close below 0.6850” would indicate that NZD has moved into a bearish phase. NZD hit a low 0.6821 on Thursday (21 Jun) before rebounding to close well above 0.6850. After the second straight day of strong gains on Friday, downward pressure has eased and the risk of a shift to a bearish phase has diminished. That said, it is premature to expect a sustained up-move as NZD is more likely to consolidate its recent loss and trade sideways at these lower levels, likely between 0.6840 and 0.6975”.
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