NZD/USD: Still room for a move to 0.6385 – UOB

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, NZD/USD could extend the advance to the 0.6385 region in the near tem.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘there is scope for NZD to edge above 0.6315 again before the risk of a more sustained pullback increases’. We indicated, ‘The next major resistance at 0.6385 is not expected to come under threat’. Our view was not wrong as NZD rose to 0.6359 and then pulled back. The pullback in overbought conditions suggests NZD is unlikely to much advance further. Today, NZD is more likely to trade sideways in a range of 0.6315/0.6360.”

Next 1-3 weeks: “We highlighted yesterday (08 May, spot at 0.6295) that NZD ‘is likely to advance further but it remains to be seen if it can break 0.6385 this time around’. NZD rose to a high of 0.6359 in NY trade before easing. Overbought short-term conditions suggests NZD could consolidate for 1-2 days. Overall, as long as 0.6265 (‘strong support’ level was at 0.6240 yesterday) is not breached, there is scope for NZD to rise to 0.6385. A breach of the ‘strong support’ would indicate that the NZD strength last Wednesday (03 May, spot at 0.6215) has come to an end.”