NZD/USD: To trade sideways between 0.5920 and 0.5980 – UOB Group
New Zealand Dollar (NZD) could trade sideways between 0.5920 and 0.5980 against US Dollar (USD). In the longer run, momentum is slowing rapidly; the chance of NZD breaking decisively above 0.6030 is slim, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Momentum is slowing rapidly
24-HOUR VIEW: "On Monday, NZD rose to 0.6031 before easing. Yesterday, Tuesday, when NZD was at 0.5995, we indicated that 'conditions remain overbought, and instead of rising, NZD is more likely to trade in a range between 0.5960 and 0.6020.' Rather than trading in a range, NZD fell, reaching a low of 0.5941 and then traded sideways. Today, NZD could continue to trade sideways, but the softer underlying tone suggests a lower range of 0.5920 and 0.5980."
1-3 WEEKS VIEW: "In our most recent narrative from two days ago, 26 May, when NZD was at 0.5990, we noted that, 'While there has been an increase in momentum, it is not enough to indicate a sustained rise just yet.' We added, 'For a sustained advance, NZD must break and hold above the significant resistance at 0.6030.' NZD then rose to 0.6031 and then pulled back. Yesterday, NZD dropped to a low of 0.5941. Even though our ‘strong support’ level at 0.5920 is not breached yet, upward momentum is slowing rapidly, and the chance of NZD breaking decisively above 0.6030 is slim. A breach of 0.5920 would indicate NZD could continue to range trade."
Author
FXStreet Insights Team
FXStreet
The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.
