NZD/USD now focused on 0.7000 – UOB

NZD/USD is seen approaching the key resistance at 0.7000 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘upward momentum has improved and NZD could strengthen to 0.6970’. The subsequent advance fell short of our expectation as NZD touched 0.6967 before dropping sharply (overnight low of 0.6898). Upward momentum has waned considerably and 0.6970 is unlikely to come into the picture for today. Overall, the current movement is viewed as part of a consolidation phase and NZD is likely to trade within a 0.6900/0.6960 range.”

Next 1-3 weeks: “We have held a positive view in NZD for about 2 weeks now (see annotations in the chart below). In our latest narrative from last Thursday (19 Nov, spot at 0.6910), we indicated that ‘further NZD gains are not ruled out but overbought shorter-term conditions could lead to a couple of days of consolidation first’. The consolidation appears to have ended and NZD has likely embarked on the next leg higher to 0.6970. A break of this level would shift the focus to 0.7000. All in, the current positive outlook is deemed as intact as long as NZD does not move below 0.6880 (‘strong support’ level previously at 0.6850).”