NZD/USD remains neutral, could visit 0.7355 – UOB

The Kiwi Dollar keeps the neutral stance for the time being, although it could pick up pace and test the mid-0.7300s vs. the buck in the near term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for NZD to consolidate was wrong as it staged a surprisingly strong rally that hit a high of 0.7301. The subsequent strong daily closing of 0.7298 in NY suggests further upward pressure even though overbought conditions could limit any further gains to 0.7330. This strong resistance is followed closely by another strong level near 0.7355 (the month-to-date high). On the downside, we do not expect yesterday’s low near 0.7235 to come into the picture. 0.7270 is already a rather solid support”.

Next 1-3 weeks: “NZD tested the top our expected 0.7160/0.7300 consolidation range with a high of 0.7301 yesterday. The undertone has improved with the subsequent strong daily closing in NY and from here; there is scope for a test of the 0.7355 high seen earlier this month. The odds for a sustained move above this level are not high at this stage but would continue to improve as long as the key support at 0.7235 is intact”.