NZD/USD faces extra consolidation, likely between 0.6450/0.6595 – UOB

NZD/USD is now seen extending the consolidative fashion between 0.6450 and 0.6595 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “NZD traded between 0.6537 and 0.6593 yesterday, close to our expected sideway-trading range of 0.6540/0.6595. However, downward momentum has picked up as NZD closed on a soft note at 0.6543 (-0.44%). From here, NZD could weaken towards 0.6500 but for today, the prospect for a sustained decline below this level is not high (next support is at 0.6475). Resistance is at 0.6560 followed by 0.6575. The 0.6593 high is not expected to come into the picture.”

Next 1-3 weeks: “We highlighted yesterday that ‘we continue to see chance of NZD posting a close above 0.6610 but the odds for such a move have diminished considerably’. NZD subsequently rose to a high of 0.6593 before dropping back down quickly. While our ‘strong support’ at 0.6520 is still intact, the rapid loss in momentum is enough to indicate the positive phase that started earlier this month has run its course. From here, NZD could edge lower but for now, any weakness is viewed as part of a 0.6450/0.6595 range.”