NZD/USD: Further gains likely above 0.6610 – UOB

NZD/USD could extend the upside to the 0.6650 once/if 0.6610 is cleared, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we expected NZD to ‘edge higher’ but were of the view that ‘0.6585 is not expected to come into the picture’. Our view was not wrong as NZD rose to 0.6565 before ending the day on a firm note at 0.6558 (+0.23%). Upward momentum has improved, albeit not by much. From here, there is room for NZD to move above 0.6585 but the chance of a sustained rise above this level is not high (next resistance is at 0.6610). Support is at 0.6540 followed by 0.6520.”

Next 1-3 weeks: “We highlighted last Friday (03 Jul, spot at 0.6505) that NZD is ‘likely to trade with an upside bias’ but we were of the view that ‘prospect for a break of 0.6585 is not high’. NZD rose to a high of 0.6565 yesterday (06 Jul) before ending the day on a firm note at 0.6558 (+0.23%). Upward momentum has improved slightly and while a move above 0.6585 would not be surprising, NZD has to close above 0.6610 in order to indicate that it is ready to move towards 0.6650 (and possibly beyond this level). The probability for such a scenario are not high for now but would remain intact as long as the ‘strong support’ at 0.6480 is not taken out (level was previously at 0.6440).”