NZD/USD now faces some range bound trading between 0.6450 and 0.6610 in the next weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
Key Quotes
24-hour view: “We did not anticipate the sharp and swift rally that sent NZD soaring to an overnight high of 0.6556. While NZD could move above the 0.6556 high, any further advance is not expected to challenge the major resistance at 0.6610 (there is another resistance at 0.6575). On the downside, a breach of 0.6490 (minor support is at 0.6515) would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “Yesterday (04 May, spot at 0.6435), we held the view that “the weakness in NZD is still intact but the pace of any further decline is likely to be slower”. We did not anticipate the sudden and sharp surge that sent NZD to a high of 0.6556. The breach of our ‘strong resistance’ level at 0.6500 indicates that the weakness in NZD that started more than a week ago has run its course. The current movement is viewed as the early stages of a consolidation phase and NZD is likely to trade between 0.6450 and 0.6610 for now.”