The upside momentum in NZD/USD could now push the cross to, initially, the 0.6885 level ahead of 0.6905, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘upward momentum has not improved by much’ and we were of the view that ‘the bias is for NZD to head higher to 0.6805’. We did not anticipate the surge in momentum as NZD blew past 0.6805 and soared to 0.6859. Further NZD strength is not ruled but overbought conditions suggest that 0.6900 is likely out of reach for today (there is another resistance at 0.6885). Support is at 0.6830 followed by 0.6805.”
Next 1-3 weeks: “While we noted yesterday (12 Jan, spot at 0.6785) that downward momentum has fizzled out, we expected NZD to trade within a range of 0.6735/0.6835. However, NZD surged above 0.6835 during NY hours (high of 0.6859). The rapid improvement in momentum indicates that NZD could advance further. Resistance is at 0.6885 followed by 0.6905. A breach of 0.6785 (‘strong support’ level) would invalidate our view.”
